Category Archives: Finance/Banking



Please view the following question and answer regarding medical aid. Is the fatwa issued by Darul Uloom Isipingo correct?

The shar’ee ruling regarding medical aid and hospital plan

Q: I recently read an article which claims that it is permissible for a Muslim to take out a medical aid contract. The article explained that if a stipulated monthly fee is paid to the medical aid company in return for which they assume responsibility for the client’s hospitalization or medical expenses, it will be permissible.

The reason for this medical aid contract being permissible in Shari’ah is that it is regarded as an ijaarah contract (i.e. hiring of services) between the member and the medical aid scheme. The ijaarah works in this manner that the member pays a fixed and mutually agreed amount monthly, and in exchange, the scheme takes responsibility for his treatment and wellbeing.

The article also stated that the medical aid scheme can be compared to hiring the services of a barber and a wet nurse. In many villages of India, it is a common and well-known practice for a family to give the barber a stipulated amount of grain or cash at the time of harvest. In exchange, the barber takes responsibility to cut the hair of the family whenever they wish during the year. In this case, although the number of haircuts that he will give to the family is unknown, this ambiguity is tolerated and overlooked as it does not lead to any dispute.

Similarly, the medical aid scheme can be compared to hiring the services of a wet nurse who is paid a fee for breastfeeding the child. In this case, the amount of milk and the number of times the wet nurse will feed the child is unknown. Despite this being unknown, the ambiguity is tolerated and overlooked as it does not lead to any dispute.

Accordingly, just as it is permissible to hire the services of the barber and the wet nurse, similarly it is permissible to hire the service of a medical aid scheme which takes responsibility to provide medical treatment whenever one requires.

Another example cited in the article was that of an armed response security company. A person pays the security company a monthly fee for the service of armed response. However, he is not certain as to whether he will require the armed response or not. Similarly, the number of times that he will require the armed response is not known. However, this ambiguity is tolerated as it does not lead to any dispute.

The article states that the only difference between a medical aid scheme and a barber, wet nurse or an armed response security company, is that the barber, wet nurse and armed response company provide the service themselves, while the medical aid company does not provide the service of medical treatment itself, but rather pays a third party to provide the service.

Based on the above arguments, is it permissible for a Muslim to take out a medical aid contract?

A: In order to correctly understand the issue in question, and to determine whether it is correct to regard a medical aid scheme as an ijaarah contract (a hire of service), we will first have to gain an understanding of the different forms of hiring services that have been recognized by Shari’ah. In this regard, Shari’ah essentially recognizes two types of ajeers (people hired to render services). The first is the ajeer-e-khaas and the second is the ajeer-e-mushtarak. Below we will present a brief explanation of both types of ajeers and the laws which relate to them.


An ajeer-e-khaas refers to a person who is paid to avail himself for a fixed duration of time in which he will render his services. Since the ajeer-e-khaas is remunerated for his time, it is not permissible for him to hire his service to anyone else during the hours of his employment.

An example of an ajeer-e-khaas is that of a worker who is paid to avail himself for a stipulated amount of time. For example, he is employed from 8am to 4pm on six days of the week for a stipulated wage. Hence, if he avails himself for the full duration of his employment, he will be entitled to receive a full wage.


Ajeer-e-mushtarak refers to a person who is hired to render a specific service. Since he is not being paid for his time, but is rather paid to render a service, he will only be entitled to receive his fee when the service has been rendered. Similarly, since he is not being paid for his time, he can accept jobs from multiple parties simultaneously.

An example of an ajeer-e- mushtarak is that of a tailor. The tailor is hired to render the service of sewing a garment for which his fee is R400. Hence, whether the tailor sews the garment in one day, one week or one month, he will only be entitled to receive R400, as he is being remunerated for his service and not his time. Similarly, it will be permissible for the tailor to accept jobs from multiple customers simultaneously.

From the above prelude, we understand that in order for one to be regarded as an ajeer-e-khaas, he will have to avail himself during the period of employment, and during this period, he cannot avail his services to other people. However, this is not the case with an ajeer-e-mushtarak, as an ajeer-e-mushtarak can hire out his services to multiple people simultaneously.

Which Category of Ajeer do Medical Aid Schemes Fall Under?

After analysing medical aid schemes, one will understand that they do not fall under any of the two categories of ajeers.

Medical aid schemes do not fall in the category of ajeer-e-khaas because they are not paid to avail themselves to their clients for a stipulated period of time.

Similarly, they do not fall under the category of ajeer-e-mushtarak as they do not render any service to the client. They are not healthcare professionals (doctors, etc.) nor are they a hospital. A person can only be categorised as an ajeer-e-mushtarak if he is providing a service to the one who hired him. Since the medical aid company is not providing any service, they cannot be regarded as an ajeer-e-mushtarak.

In essence, it is incorrect to regard a medical aid scheme to be the hire of a service.

The Reality of Medical Aid

At this juncture, the question will arise that if a medical aid scheme is not the hire of a service, then what type of contract is it?

In a medical aid scheme, we find that one pays the medical aid company a fixed monthly premium in exchange of them undertaking to fulfil one’s liability. Thereafter, when the client requires medical treatment, he will go to a doctor or hospital. After receiving the required treatment, the medical aid company will remunerate the doctor or hospital on their client’s behalf.

Thus, after examining the medical aid scheme, it is clear that their operations are actually identical to that of an insurance company.

Insurance is haraam in Islam due to the elements of interest and gambling being found in it. One is uncertain as to whether one will be hijacked or meet in an accident or one’s house or business will be burgled in the future or not. Any transaction wherein one pays for something which is suspended upon an uncertain event is in actual fact gambling. This is the definition of gambling according to all the Ulamaa. In the case of gambling, one spends a certain amount of money in the hope of gaining something which is uncertain. One might lose all one’s money and get nothing or one might get something more or less than what one had spent. Hence, we see the element of gambling found in an insurance policy. Further, if one receives the insurance payout and one is paid more than the amount one had paid to the insurance company, then in this case the extra amount one has received is riba (interest). Hence taking out an insurance policy is impermissible in Shari’ah.

As far as the medical aid scheme is concerned, we find these two elements glaringly found in it. One does not know when one will fall ill and require treatment, and in the case where one requires treatment, one might receive more or less than the amount one had spent in premiums to the medical aid scheme. Hence, on account of the elements of qimaar (gambling) and riba (interest), the medical aid scheme is declared haraam in Shar’iah. There are severe warnings in the Quraan Majeed and Hadith for those who get involved in the grave sin of gambling and interest.

The Comparison to a Barber, Wet Nurse or Armed Response Security Company that are Paid a Monthly Amount

The argument tendered that medical aid schemes can be compared to a barber, wet nurse or an armed response security company that are paid a fixed monthly fee, is incorrect. The reason is that there is a vital and fundamental difference between a medical aid company and a barber, wet nurse or armed response company.

The difference is that the money which the barber, wet nurse and armed response company receive is in lieu of a service that they themselves will render. In the case of the barber, he or one of his staff will carry out the service of giving a haircut. Similarly, in the case of the wet nurse, she herself will breastfeed the child. Likewise, in the case of the armed response company, they themselves provide the service of the armed response.

As for the medical aid company, they are not providing any service. Rather, the medical aid company merely suffices on settling the medical bills of their clients. In essence, they are accepting money to give money. It is for this reason that medical aid companies cannot be compared to a barber, wet nurse or armed response security company.

Can We regard the Medical Aid Company as a Wakeel (Agent) to Stand Responsible to arrange Medical Treatment?

If someone argues that although the medical aid company is not providing any treatment to their customers, they are standing responsible to arrange medical treatment of the client. Thereafter, when the client requires treatment, they subcontract the service of doctors, hospitals, etc. In other words, they are taking payment to arrange treatment for their clients when required, and to thereafter pay the doctors and hospitals for the treatment.

This brings us to the question of whether one can appoint a person and continue to pay him monthly premiums to stand responsible for any needs that he has in the future.

The answer to this question is that this is regarded as a wakaalat (appointing someone to carry out a specific task for a fee). However, in order for this wakaalat to be valid in Shari’ah, it is necessary for the wakeel (medical aid company) to do the work for which they are appointed, and for a fixed fee to be stipulated for every separate job that they carry out. In this case, since the patient himself independently seeks treatment from the doctor or hospital, and the medical aid company is not doing any work besides authorising payment and settling the bills, the medical aid company cannot be regarded as a wakeel for the client. It is for this reason we find that if the medical aid does not pay, the doctor or hospital will hold the client liable as the client was the one who hired their service.

Apart from this, a wakeel (agent) only deserves a set fee for the set service that he is appointed for. Hence, for them to charge the client monthly premiums on an on-going basis to merely remain on standby is not a recognised service in Shari’ah that will entitle them to a fee. Accordingly, this wakaalat is baatil (null and void).

In reality, the medical aid scheme or hospital plan is only given a medical name but is a contract of money for money where the medical aid company is on standby to pay bills and this is no different to insurance. Hence, according to all the four mazhabs, this contract is baatil on account of the elements of riba and qimaar being found in it.


Shar’ee Solution

If one wishes to enter into a halaal contract whereby one receives medical treatment at the time of need, then the Shar’ee solution is for one to directly pay a hospital a monthly fee for providing their service. Thereafter, whenever one falls ill, the hospital itself, in lieu of the money taken, will treat the patient. In this situation, since the hospital itself is providing the service, it will be permissible as this contract is a contract of money in exchange of service, and not a contract of money for money, as is the case of the present-day medical aid schemes and hospital plans.

And Allah Ta’ala knows best.

ANSWER (By Mujlisul Ulama): 

The answer on the issue of medical plans is correct.  We have explained medical aid insurance in detail in two books which are available on our website. Hardcopies are also available.

The only error in the fatwa is the suggested ‘Shar’i solution’. Firstly, currently no hospital has any such plan as suggested by Isipingo’s Mufti.

Secondly, if we imagine that there is such a hospital plan, the hospital will be compelled by law to put the millions of rand in a trust account where the banks will pay interest. And, this is haraam.

Thirdly, the very same element of maisar (gambling) is attendant to the suggested hospital plan. The healthy client will be making monthly installments to the hospital on the very same basis that he pays premiums to a medical aid scheme. The monthly payment will be made on the basis of assumed future sickness, and this element reduces the suggested plan to a pure insurance scheme.

Fourthly, what is the Shar’i status of the money paid to the hospital? In the event of the client requiring medical service, the money given to the hospital will be in lieu of the service. But this is exactly the same as the benefit provided by a conventional insurance company. The service/benefit is hinged on a future uncertain event which may or may not transpire, and this is maisar (gambling) according to the Shariah.

In the event that the client never requires the service of the hospital, then in terms of the law as it stands presently, the money will belong to the hospital as is the case with all medical insurance schemes whereas in terms of the Shariah, the money will be the inheritance of the heirs of the deceased who had died without ever acquiring the service of the hospital. The money is in the category of Amaanat which obviously the hospital does not recognize.

Fifthly, in view of the money deposited with the hospital being Amaanat, the client has the right at all times of withdrawing his money from the hospital. But, there is no such hospital scheme which complies with the rules of the Shariah. Hence, the solution suggested by Isipingo is unrealistic, not workable in terms of the Shariah, and not permissible.

From the Shariah’s perspective, the answer for the exorbitant, haraam, satanic fees charged by the medical fraternity, is to save and to have trust (Tawakkul) on Allah Ta’ala. People pay high premiums monthly to the medical insurance schemes. Instead of contracting with the haraam medical insurance schemers, they should put the monthly installments in a savings account, have trust on Allah Ta’ala and make dua for aafiyat (safety). Allah Ta’ala will then take care.

However, the shaitaani attitude of Muslims today is total lack of Tawakkul.  They have shifted tawakkul from Allah Ta’ala to tawakkul on kuffaar schemes, hence Allah Ta’ala involves them in their own preconceived future medical crises.

As for the poor, if the Zakaat-payers honestly and correctly discharge their Zakaat obligations, there will be ample funds to cater for the medical needs of the poor.

The demand of the Shariah is that Muslims reform themselves and rectify their bond with Allah Ta’ala. Only then will there be solutions for all their problems. Rasulullah (Sallallahu alayhi wasallam) said:

“Whatever is by Allah is obtainable only by means of obedience (to Allah Ta’ala).”


By Mujlisul Ulama

The following article by experts illustrates with evidence the obvious FRAUD of the bitcoin scam – a fraud which was not hidden from people of intelligence. Some moron muftis without understanding what the scam was all about, had stupidly issued fatwas of permissibility. Even ordinary people who lack expert knowledge in the Deeni and secular fields, were able to sense the fraud, but maajin muftis only illustrated their jahaalat with their fatwas of permissibility.

Majority of bitcoin trading is a hoax, new study finds

Published Fri, Mar 22 2019 • 11:58 AM EDT

Key Points

  • Ninety-five percent of spot bitcoin trading volume is faked by unregulated exchanges, according to a study from Bitwise this week.
  • The firm analyzed the top 81 crypto exchanges by volume on industry site They report an aggregated $6 billion in average daily bitcoin volume. The study finds that only $273 million of that is legitimate.
  • “People looked at cryptocurrency and said this market is a mess; that’s because they were looking at data that was manipulated,” says Matthew Hougan, global head of research at Bitwise.

A smartphone displays the Bitcoin GBP market value on the stock exchange via the Yahoo Finance app.

Guillaume Payen | LightRocket | Getty Images

New research is casting even more doubt on the legitimacy of bitcoin trading.

An analysis published by Bitwise this week shows that 95 percent of bitcoin spot trading is faked by unregulated exchanges. The survey, first reportedby The Wall Street Journal, echoes concerns by regulators that cryptocurrency markets are still ripe for manipulation.

Bitwise, an asset manager in the process of trying to list the first-ever bitcoin exchange-traded fund, said it met with the Securities and Exchange Commission on Tuesday to discuss its application. As a part of the process, it submitted analysis that could help regulators cut through the noise.

“People looked at cryptocurrency and said this market is a mess; that’s because they were looking at data that was manipulated,” said Matthew Hougan, global head of research at Bitwise. “When you cut away the echo chamber of these nonsense numbers, it should be an efficient, well-arbitraged market.”

The analysis showed that “substantially all of the volume” reported on 71 out of the 81 exchanges was wash trading, a term that describes a person simultaneously selling and buying the same stock, or bitcoin in this case, to create the appearance of activity in the market. In other words, it’s not real.

Those exchanges report an aggregated $6 billion in average daily bitcoin volume. The study finds that only $273 million of that is legitimate.

“The idea that there’s fake volume has been rumored for a long time; we were just the first people to systematically look at which exchanges were delivering real volume,” Hougan told CNBC.

The San Francisco-based firm compared at Coinbase Pro, which reports about $27 million in average daily volume in bitcoin. Its median “spread,” or difference between the price a seller wants and the price a buyer wants, for bitcoin was about 1 cent. That scenario passed Bitwise’s test for having real volume.

But in another stark comparison, CoinBene — the biggest reported exchange on — has a nearly $15 spread. Hougan said they found other extreme examples of exchanges with a spread of more than $300.

“It is surprising that an exchange with almost 18 times the volume of Coinbase Pro would have a spread that is 1,500 times larger,” Bitwise said in the report.

Exchanges may have an incentive to report fake volume. Bad actors may look to attract listings for new initial coin offerings, or ICOs, who want their cryptocurrency on an exchange where more trading goes on, Bitwise said. Those fees can run from $1 million to $3 million per listing, according to data from Autonomous Next.

U.S. regulators have taken a cautious approach to making bitcoin mainstream for traders. The SEC highlighted the risk of manipulation as reason for rejecting applications for other cryptocurrency ETFs. The office of New York Attorney General also flagged the issue in a recent report warning that exchanges are vulnerable. Because most cryptocurrency trading platforms don’t use the same monitoring tools as stock exchanges, SEC Chairman Jay Clayton has warned that investors may not get a fair assessment of bitcoin’s price.

“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation,” Clayton said in November at the Consensus Invest Conference in Manhattan. “It’s an issue that needs to be addressed before I would be comfortable.”

Hougan said this also explains why trading volume for regulated bitcoin futures has seemed weak. Chicago-based CME and Cboe began listing bitcoin derivatives at the end of 2017 but have had much lower volumes than the $6 billion reported by unregulated exchanges.

“When you realize the size of the real bitcoin market, the CME starts to look a lot more significant,” Hougan said.

The Invalidity of the “Running Musharakah” Scheme


“Running Musharakah” is a weird ‘partnership’ scheme conjectured by Hadhrat Mufti Taqi to promote the interests of the capitalist banks. It is a scheme which has no relationship with any kind of valid Shar’i Shirkat mode.

In the “running musharakah” scheme the account-holders who are deceptively proclaimed the ‘partners’ in business ventures, are paid pure, unadulterated interest (riba) in the guise of ‘profit’. Interest is imagined to be profit, and with this imaginary ‘profit’ theory the depositors are duped into believing that the gains they are receiving are halaal profit when in reality it is nothing but interest.

There is no bank, even if it happens to be Muslim-owned, geared for Shariah-compliant business products. The so-called Islamic banks and kuffaar capitalist banks offering ‘islamic’ accounts, are all agents of Shaitaan. They bamboozle the unsuspecting and ignorant Muslim public with Islamic terminology and ‘halaal’ certificates issued by the ‘Scholars for Dollars’ who man the corrupt so-called ‘shariah boards’ of the banks. They operate in exactly the same way as the Carrion-Halaalizing bodies such as SANHA and the MJC. Whilst the latter miserable specimens of humanity halaalize carrion, the miserable shariah board employees of the banks and the Scholars for Dollars halaalize interest (riba).

This booklet consists of two parts. Part one is Mufti Taqi’s article outlining his baatil “running musharakah” idea. Part two is our Refutation of the riba-halaalizing “running musharakah” scheme.


Mujlisul Ulama of S.A.

12 Safar 1435 / 16 December 2013


By Mufti Taqi Uthmaani Sahib



Many financial institutions finance the working capital of an enterprise by opening a running account for them from where the clients draw different amounts at different intervals, but at the same time, they keep returning their surplus amounts. Thus the process of debit and credit goes on upto the date of maturity, and the interest is calculated on the basis of daily products.

Can such an arrangement be possible under the Musharakah or Mudarabah modes of financing? Obviously, being a new phenomenon, no express answer to this question can be found in the classical works of Islamic Fiqh. However, keeping in view the basic principles of Musharakah the following procedure may be suggested for this purpose:

• A certain percentage of the actual profit must be allocated for the management.

• The remaining percentage of the profit must be allocated for the investors.

• The loss, if any, should be borne by the investors only in exact proportion of their respective investments.

• The average balance of the contributions made to the Musharakah account calculated on the basis of daily products shall be treated as the share capital of the financier.

• The profit accruing at the end of the term shall be calculated on daily product basis, and shall be distributed accordingly.

If such an arrangement is agreed upon between the parties, it does not seem to violate any basic principle of the Musharakah. However, this suggestion needs further consideration and research by the experts of Islamic jurisprudence. Practically, it means that the parties have agreed to the principle that the profit accrued to the Musharakah portfolio at the end of the term will be divided based on the average capital utilized per day, which will lead to the average of the profit earned by each rupee per day. The amount of this average profit per rupee per day will be multiplied by the number of the days each investor has put his money into the business, which will determine his profit entitlement on daily product basis.

Some contemporary scholars do not allow this method of calculating profits on the ground that it is just a conjectural method, which does not reflect the actual profits really earned by a partner of the Musharakah. Because the business may have earned huge profits during a period when a particular investor had no money invested in the business at all, or had a very insignificant amount invested, still, he will be treated at par with other investors who had huge amounts invested in the business during that period. Conversely, the business may have suffered a great loss during a period when a particular investor had huge amounts invested in it. Still, he will pass on some of his loss to other investors who had no investment in that period or their size of investment was insignificant.

This argument can be refuted on the ground that it is not necessary in a Musharakah that a partner should earn profit on his own money only. Once a Musharakah pool comes into existence, all the participants, regardless of whether their money is or is not utilized in a particular transaction earn the profits accruing to the joint pool. This is particularly true of the Hanafi School, which does not deem it necessary for a valid Musharakah that the monetary contributions of the partners are mixed up together. It means that if ‘A’ has entered into a Musharakah contract with ‘B’, but has not yet disbursed his money into the joint pool, he will be still entitled to a share in the profit of the transactions effected by ‘B’ for the Musharakah through his own money. Although his entitlement to a share in the profit will be subject to the disbursement of money undertaken by him, yet the fact remains that the profit of this particular transaction did not accrue to his money, because the money disbursed by him at a later stage may be used for another transaction. Suppose ‘A’ and ‘B’ entered into a Musharakah to conduct a business of Rs. 100,000/- They agreed that each one of them shall contribute Rs. 50,000/- and the profits will be distributed by them equally. ‘A’ did not yet invest his Rs. 50,000/- into the joint pool. ‘B’ found a profitable deal and purchased two air conditioners for the Musharakah for Rs. 50,000/- contributed by himself and sold them for Rs. 60,000/-, thus earning a profit of Rs. 10,000/-. ‘A’ contributed his share of Rs. 50,000/- after this deal. The partners purchased two refrigerators through this contribution which could not be sold at a greater price than Rs. 48000/- meaning thereby that this deal resulted in a loss of Rs. 2000/- Although the transaction effected by ‘A’s money brought loss of Rs. 2000/- while the profitable deal of air conditioners was financed entirely by ‘B’s money in which ‘A’ had no contribution, yet ‘A’ will be entitled to a share in the profit of the first deal. The loss of Rs. 2000/- in the second deal will be set off from the profit of the first deal reducing the aggregate profit to Rs. 8000/-. This profit of Rs. 8000/- will be shared by both partners equally. It means that ‘A’ will get Rs. 4000/-, even though the transaction effected by his money has suffered a loss.

A possible objection to the above explanation may be that in the above example, ‘A’ had undertaken to pay Rs. 50,000/- and it was known beforehand that he would contribute a specified amount to the Musharakah. But in the proposed running account of Musharakah where the partners are coming in and going out every day, nobody has undertaken to contribute any specific amount. Therefore, the capital contributed by each partner is unknown at the time of entering into Musharakah, which should render the Musharakah invalid.

The answer to the above objection is that the classical scholars of Islamic Fiqh have different views about whether it is necessary for a valid Musharakah that the capital is pre-known to the partners. The Hanafi scholars are unanimous on the point that it is not a precondition. Al-Kasani, the famous Hanafi jurist, writes:

According to our Hanafi School, it is not a condition for the validity of Musharakah that the amount of capital is known, while it is a condition according to Imam Shafi’i. Our argument is that Jahalah (uncertainty) in itself does not render a contract invalid, unless it leads to disputes. And the uncertainty in the capital at the time of Musharakah does not lead to disputes, because it is generally known when the commodities are purchased for the Musharakah, therefore it does not lead to uncertainty in the profit at the time of distribution.” (Badai-us-sanai v.6 p.63)

It is, therefore, clear from the above that even if the amount of the capital is not known at the time of Musharakah, the contract is valid. The only condition is that it should not lead to the uncertainty in the profit at the time of distribution. Distribution of profit on daily product basis fulfills this condition.

It is true that the concept of a running Musharakah where the partners at times draw some amounts and at other times inject new money and the profits are calculated on daily products basis is not found in the classical books of Islamic Fiqh. But merely this fact cannot render a new arrangement invalid in Shariah, so far as it does not violate any basic principle of Musharakah. In the proposed system, all the partners are treated at par. The profit of each partner is calculated on the basis of the period for which his money remained in the joint pool. There is no doubt in the fact that the aggregate profits accrued to the pool is generated by the joint utilization of different amounts contributed by the participants at different times. Therefore, if all of them agree with mutual consent to distribute the profits on daily products basis, there is no injunction of Shari’ah which makes it impermissible; rather, it is covered under the general guidelines given by the Holy Prophet in his famous hadith, as follows:

“Muslims are bound by their mutual agreements unless they hold a permissible thing as prohibited or a prohibited thing as permissible.”

If distribution on daily products basis is not accepted, it will mean that no partner can draw any amount nor can he inject new amounts to the joint pool. Similarly, nobody will be able to subscribe to the joint pool except at the particular dates of the commencement of a new term. This arrangement is totally impracticable on the deposit side of the banks and financial institutions where the accounts are debited and credited by the depositors many times a day. The rejection of the concept of the daily products will compel them to wait for months before they deposit their surplus money in a profitable account. This will hinder the utilization of savings for development of industry and trade, and will keep the wheel of financial activities jammed for long periods. There is no other solution for this problem except to apply the method of daily products for the calculation of profits, and since there is no specific injunction of Shari’ah against it, there is no reason why this method should not be adopted.

At the end of the mudhaarabat period, the profits which are accrued, that owsatan (average), in a day in the rupees, how much profits were accumulated?

In 30 days, a person acquired 30 rupees profit on 300 rupees. So now, it means that upon 300 rupees, one rupee profit was accrued per day. Therefore, on one rupee on one day, the profit was 0.00333.

Now, if a persons one rupee stayed for 15 days in the mudhaarabat account, then the profit of 0.00333 should be multiplied by 15, the result being that the person had gained 0.04999 profits on the one rupee for 15 days. Now, if a persons ten rupees stayed for 15 days (in the mudhaarabah account), then the profit should be multiplied by ten which is a profit of 0.4999. This is called the daily product method.

THE REFUTATION (By Mujlisul Ulama):

The very term ‘mushaarakah’ is alien to our Fuqaha. All our Fuqaha use the term Shirkat. The reason for mentioning this fact is to indicate the liberalist attitude of Hadhrat Mufti Taqi Sahib. There is no need to deflect from the terms used by the Fuqaha for Shar’i enterprises.

(1) The arrangement outlined in the beginning of page 1 of Mufti Taqi’s article, is in reality not a valid Shirkat according to the Shariah. It is a pure savings account arrangement accruing interest for the depositors. The depositors have absolutely no idea of what is happening in the business venture. They don’t even know what their percentage profit is. They simply deposit money into the account, withdraw as they require and at the end of the month see a ‘dividend’ credited to them. This ‘dividend’ is pure riba.

The contention that the arrangement is a ‘mushaarakah’ enterprise is utterly baseless and weird. The following elements are essential requisites in a valid Shar’i Shirkat:

(a) All parties in the Shirkat are on an equal footing in so far as transacting is concerned. All parties have the right to buy, sell, i.e. trade in general. A partner cannot be denied actual physical participation in the Shirkat enterprise.

(b) An essential requisite of Shirkat is the validity of the Waqaalat of every partner. Each partner is the wakeel of the other partner. A Shirkat which excludes automatic Waqaalat is baatil.

(c) The partnership business, i.e. the Shirkat enterprise, belongs to all the partners who are real, physical, intelligent persons. The Shirkat cannot be between people and imaginary donkeys termed ‘legal entity’ or a company. The Shariah does not recognize the validity of a legal donkey which is the fundamental basis of the musharakah concept produced by the banks where depositors, the so-called ‘partners’, deposit their monies for riba gains which are deceptively termed ‘dividends’ or ‘profit’.

(d) All partners are liable for the debts of the partnership in proportion to their capital investment.

All four of these requisites are non-existent in the type of ‘mushaarakah’ scheme proposed by Mufti Taqi. Thus, regardless of his meandering explanations and ta’weelaat’ to confer jawaaz, the mushaarakah products offered by the banks and those schemed by Mufti Taqi are baatil and haraam.

(2) Regarding requisite (a), above, there is no equality of transacting. The depositors who are the providers of the capital investment, have absolutely no say and no power to transact in or on behalf of the supposed partnership business. The only act they can perform is to deposit money in their savings accounts. They do not have the haziest idea of the business, its operation, its functioning, and the myriad of other factors associated with a huge corporate venture controlled by the riba capitalist magnates.. Their concern is only to deposit money in the bank and claim a dividend (riba). Besides this, they have absolutely no relationship with the legal donkey who in terms of Mufti Taqi’s mushaarakah scheme is the primary partner in the business.

All the depositors are thus contracting with a legal donkey who is their partner and in whose sole control is the operation of the business. Every aspect of the business is in the control of the legal donkey whose workers are the directors. The directors are not necessarily partners. And, even if they happen to be partners, they too will be transacting with the legal donkey.

The legal donkey debars all the ‘partners’ from doing any trading activity on behalf of and in the name of the company. Only the directors whom the legal donkey has appointed are allowed to trade and transact in the name of the company. Negating the transacting right of the partners invalidates the partnership. Hence, there is no valid partnership according to the Shariah in the scheme proffered by Mufti Taqi Sahib.

(3) With regard to requisite (b), above, Mufti Taqi’s scheme of musharakah excludes Waqaalat. In his scheme, the depositors (the supposed partners) are not each other’s wakeel. They are never the Wakeels of the legal donkey with whom they have supposedly contracted and invested. While the legal donkey is their wakeel, they are not its wakeel. The excision of the essential requirement of Waqaalat renders Mufti Taqi’s musharakah concept baatil.

(4) With regard to requisite (c) above, there is simply no existence of a Shirkat in terms of the Shariah. The company is not a human being with whom transactions could be made. Company XYZ which ‘accepts’ the investments is a legal fiction. Despite being a fictitious donkey, the law encumbers this fictitious ‘person’ with rights and obligations which in reality should have been the rights and obligations of the real, human partners – all the investors.

(5) With regard to requisite (d), above, the so-called partners are completely absolved of all obligations. Whilst they (the depositors) have the right in terms of kufr law to claim their share of the riba gains paid by the legal donkey, they are totally absolved of all liabilities incurred by the donkey in the operation of the business by its (the donkey’s) workers (the directors). This vital element belies the claim that the venture is a valid shariah compliant shirkat.

According to the Shariah, the partners in a Shirkat are responsible for the liabilities. If there is a loss, all the partners have to bear the loss in proportion to their capital investment. They are not allowed to go scot free whilst the creditors have to suffer the loss incurred by the legal donkey in the name of musharakah. There is no absolution from debt in terms of the Shariah. This absolution from debt inherent in the capitalist system effectively denies the claim of the existence of musharakah.

The aforementioned explanation is sufficient to expose the invalidity of Mufti Taqi’s musharakah scheme. In view of the butlaan (invalidity/being null and void) of the proffered musharakah scheme, there is really no need to proceed further for refuting the other aspects of the scheme. Nevertheless, the other aspects of the scheme are also in conflict with the Shariah, hence the need to proceed with our refutation.

(6) Stating the “procedure” in terms of the “basic principles of Musharakah”, Mufti Taqi says: “A certain percentage of the actual profit must be allocated for the management.”

This contention is baseless. This procedure is not consonant with the “basic principles” of Shirkat. It is imperative to distribute the entire sum of the net profit. The profit for distribution is the balance remaining after payment of management/running/operational expenses. That is, gross profit minus all trade expenses is the net profit which has to be compulsorily distributed to the partners. Management expenses are trade expenses.

However, in the legal fiction capitalist system to which Mufti Taqi seeks to render the Shariah subservient, the directors compulsorily withhold a large amount of the profits which they will utilize at their own sweet discretion. The partners who are the rightful owners of the profit have no say whatsoever. The decrees of the directors appointed by the legal donkey are the holy writ. The management expenses are paid from the day-to-day sales. But, in the baatil musharakah scheme of the riba banks, despite the trade expenses having already been paid, they hold back a substantial amount from the net profits for future development, etc. The partners have no say in this malpractice. In terms of kufr laws, the directors driving the legal donkey have the right to decide how the undistributed amount of the profit will be utilized. This element of the procedure suggested by Mufti Taqi is untenable with the principles of Shirkat.

(7) Mufti Taqi says: “The loss, if any, should be borne by the investors only in exact proportion of their respective investments.”

Although this is correct, it is not the factual position in the company (legal donkey) scheme. In this scheme, the investors do not bear any losses. At most, they stand to lose only their savings in the bank – savings which constitute the ‘capital investment’ of the baseless musharakah scheme.

(8) Mufti Taqi says: “The average balance of the contributions made to the Musharakah account calculated on the basis of daily products shall be treated as the share capital of the financier.”

This theory is untenable It is a massive deception. The capital of the Shirkat enterprise is the actual amount invested by the partners. However, since there are no real partners in the capitalist scheme evolved by Mufti Taqi – they are merely savings-account holders who collect interest in the name of dividends/profit – this ‘average balance’ has been conjectured in a futile attempt to present the baatil capitalist system of hallucinated ‘partnership’ as a ‘shariah-compliant’ product when in reality it is not so.

During the subsistence of the Shirkat, the partners may not withdraw any amount of their capital investment. The capital investment is repaid only on termination of the Shirkat or when any partner decides to opt out. The creature of ‘average balance of contributions being the share capital’ is a haraam and baatil creation to sustain the capitalist model which produces nothing but interest which is deceptively paid to the account-holders as ‘profit’ in the name of the ‘musharakah phantom.

(9) Mufti Taqi Sahib says: “Practically, it means that the parties have agreed to the principle that the profit accrued to the Musharakah portfolio at the end of the term will be divided based on the average capital utilized per day, which will lead to the average of the profit earned by each rupee per day……………………”

This idea is absolute nonsense in relation to a valid Shar’i Shirkat. Actual profit is a fundamental of Shirkat, not average profit or some other figure in terms of an imaginary theory unsustainable in the light of the principles governing the Islamic concept of Shirkat.

(10) Mufti Taqi says: “Some contemporary scholars do not allow this method of calculating profits on the ground that it is just a conjectural method, which does not reflect the actual profits really earned by a partner of the Musharakah.”

Undoubtedly, this method is conjectural in relation to calculation of the actual profit. The Shariah stipulates that actual profits have to be distributed, not ‘conjectural profits’.

Explaining the ground on which the opposition basis their refutation of the conjectural method, Mufti Taqi says: “Because the business may have earned huge profits during a period when a particular investor had no money invested in the business at all…”

This is a perfectly valid ground on which to basis the rejection of Mufti Taqi’s conjectural scheme. In a futile attempt to answer this contention of the opposition, Mufti Taqi says: “This argument can be refuted on the ground that it is not necessary in a Musharakah that a partner should earn profit on his own money only. Once a Musharakah pool comes into existence, all the participants, regardless of whether their money is or is not utilized in a particular transaction earn the profits accruing to the joint pool.”

This argument is deceptive and invalid because he has not answered the argument of the opposition. His answer relates to another scenario, not to the scenario in which the ‘investor’ “had no money invested in the business at all.” The question arises: Why did he have no money invested at all? The answer is that he has withdrawn his so-called investment. Withdrawal of one’s investment is in actual fact the termination of the Shirkat in relation to the withdrawing partner. Hence, this former ‘partner’ is not entitled at all to any profit since he is no longer a partner. But in terms of Mufti Taqi’s hallucinatory method, the one who is not a partner is entitled to substantial profit when there happens to be “huge profits”.

Withdrawal of the investment signifies the termination of the partnership relative to the withdrawer, hence he is not entitled to any profit. The entitlement to profit mentioned by Mufti Taqi whether a particular investor’s capital has been used or not in any particular transaction, applies to a person who is a valid partner. It does not apply to one whose partnership agreement stands cancelled in consequence of him having withdrawn his capital investment. Entitlement to profit is on the basis of Maal or Amaal or Dhimaan. None of these three justifying foundational principles for the justification of claiming profit applies to one who has withdrawn from the partnership. Thus, the contention that he is entitled to profit is baatil.

Mufti Taqi’s argument that the “mixing of the monetary contributions of the partners” is not necessary for a valid musharakah is not being contested. The introduction of this issue in the context of the conjectural method is baseless. The argument is that profit is being paid to a person who is not a partner. The argument is not that profit cannot be paid to a partner because his capital investment is lying idle in the business. Once a valid Shirkat has come into existence, the partners are entitled to profit regardless of their respective amounts of funds being used or not. This is not the issue being contended. The issues are:

(a) The method suggested by Mufti Taqi is baseless conjecture.

(b) The one who has withdrawn his capital investment being paid a share of the profit in terms of the conjectural method, is not a partner.

(11) Venturing another shot in the dark, Mufti Taqi says: “A possible objection to the above explanation may be that in the above example, ‘A’ had undertaken to pay Rs 50,000 and it was known beforehand that he would contribute a specified amount to the Musharakah. But in the proposed running account (i.e. in the scheme suggested by Mufti Taqi) of Musharakah where the partners are coming in and going out every day, nobody has undertaken to contribute any specific amount. Therefore the capital contributed by each partner is unknown at the time of entering into Musharakah, which should render the Musharakah invalid.

The answer to the above objection is that the classical scholars of Islamic Fiqh have different views about whether it is necessary for a valid Musharakah that the capital is pre-known to the partners. The Hanafi scholars are unanimous on the point that it is not a precondition………while it is a condition according to Imam Shafi’. Our argument is that the Jahalah (uncertainty) in itself does not render a contract invalid, unless it leads to disputes. And the uncertainty in the capital at the time of the Musharakah does not lead to disputes, because it is generally known when the commodities are purchased for the Musharakah, therefore it does not lead to uncertainty in the profit at the time of distribution.”

This is another deceptive ‘refutation’ based on an imaginary objection which is indicated by his statement “A possible objection…” This ‘possible’ or imagined objection is not an objection of the opposition. The objection has already been stated and explained in No.10, above. Furthermore, the Hanafi view will coincide with the Shaafi’ view in the event of the jahaalah (ambiguity) leading to dispute. This proviso is explicitly stated by the Hanafi Fuqaha, and which Mufti Taqi has mentioned above.

(12) Mufti Taqi says: “It is true that the concept of a running Musharakah where partners at times draw some amounts and at other times inject new money and the profits are calculated on daily products basis is not found in the classical books of Islamic Fiqh. But merely this fact cannot render a new arrangement invalid in Shariah, so far as it does not violate any basic principle of Musharakah.”

This contention is agreed and accepted. But Mufti Taqi overlooks the fact that the basic principles of Shirkat are in fact violated in the new system he has suggested. The violations are as follows:

(i) The method of calculating the profit is pure conjecture while the Shariah’s principle is that the profit must be a known entity.

ii) In this new scheme, persons who are not partners are paid profits for which they are not entitled since they have withdrawn their capital investment. This is in diametric conflict with the principles of Shirkat.

(iii) The effect of the blooming ‘daily product’ method is unadulterated riba. This shall be explained further on in this discussion, Insha-Allah. Instead of investment acquiring profit, it gains interest, pure and simple.

Thus, the ‘running musharakah’ concept is haraam, not because it is new or because there is no mention of it in the kutub of the Shariah. It is baatil because it is in violation of the basic principles of Shirkat as mentioned above, and its yield is nothing other than riba.

A further element of impermissibility of the new scheme is the negation of the liability of the partners. As explained earlier, the socalled partners are not responsible for losses and the debts incurred by the company. The creditors have to suffer the loss. In addition the essential requisite of Waqaalat is cancelled. Also, a substantial amount of the net profit is withheld at the discretion of the donkey’s directors. The partners have no power and no right in terms of the terms of the kufr system to claim the withheld sum.

(13) The example which Mufti Taqi presents to justify his “running musharakah” concept is superfluous. There is no support for his scheme in the example in which one partner’s capital had not as yet been employed, nevertheless, he participates in the effects of the partnership, whether it be profit or loss. This issue is not being contested nor does it lend support to the haraam “running musharakah” scheme which is in conflict with the Shariah’s principles of Shirkat.

(14) Mufti Taqi says: “Therefore, if all of them agree with mutual consent to distribute the profits on daily product basis, there is no injunction of Shariah which makes it impermissible, rather it is covered under the general guidelines given by the Holy Prophet in his famous hadith, as follows: ‘Muslims are bound by their mutual agreements unless they hold a permissible thing as prohibited or a prohibited thing as permissible.”

The Hadith cited by Mufti Taqi unequivocally excludes prohibitions of the Shariah from the command to honour mutual agreements. What we are saying is that since the ‘running musharakah’ scheme violates the Shariah on several issues as explained above, it cannot be granted the coverage of the Hadith. On the contrary, the Hadith prohibits this imaginary musharakah on the basis of it being haraam which may not be legalized by mutual consent. The Shariah’s injunctions which render the new-fangled scheme impermissible have already been explained earlier.

By mutual consent actual profits could be distributed on a daily system. But then, a viable system has to be formulated for effecting this onerous task. Mutual consent cannot halaalize and legalize distribution of fictitious ‘profits’. The figment termed ‘profit’ in the confounded haraam ‘running musharakah’ scheme is actual interest. The presentation of the Hadith in this context is deceptive or erroneous.

(15) Elucidating his ‘running musharakah’ scheme, Mufti Taqi proffers the following example: “In 30 days, a person acquired 30 rupees profit on 300 rupees. So now it means that upon 300 rupees, one rupee profit was accrued per day. Therefore, on one rupee on one day, the profit was 0.00333. Now, if a person’s one rupee stayed for 15 days in the mudhaarabat account, then the profit of 0.00333 should be multiplied by 15, the result being that the person had gained 0.04999 profits on the one rupee for 15 days. Now, if a person’s ten rupees stayed for 15 days in the mudhaarabat account, then the profit should be multiplied by ten which is a profit of 0.4999. This is called the daily product method.”

The consequence of this rigmarole is pure interest based on a truly stupid, hallucinated haraam method. It is pure conjecturing which produces riba. A rudimentary comprehension of arithmetic is enough to understand that the net effect of the method of calculation depicted in the above example is that the gain for the investor is a percentage of his capital investment. It is not a percentage of the actual profits.

The .000333 is a percentage of the 300 rupees capital investment. Now in this hallucinatory scheme, the so-called ‘profit’ is a percentage of the capital investment, not a percentage of the actual profit. The baseless method imagines that the investor’s one rupee will perpetually yield the same initial profit, namely, 30 rupees in 30 days on 300 rupees investment. Pretending that this illusion is an established fact, the scheme proceeds to calculate ‘profit’ as a percentage of capital investment regardless of there being actual profit or actual loss, or whether the rupees in future yield more or less profit than the initial 30 rupees mentioned in the example. In fact the initial 30 rupees profit is also a figment in the fictitious haraam scheme. Banks have a fixed system and operate accordingly without regard for profit or loss. They pay interest on savings regardless of the facts of the ground.

The example presented by Mufti Taqi unequivocally confirms that the gains paid to depositors – they are never conscious investors in a valid Shirkat enterprise – are nothing but interest. Despite Mufti Taqi being such a learned man, his overlooking this fact or his failure to understand this simple fact beggars credulity. The Shariah emphatically stipulates shares from the actual profits, not from imagined ‘profits’. The consequence of imagined ‘profits’ is riba.

A simpler example for better understanding of this deception is a case in which the profit per rand has initially been calculated as one cent. That is, one rand accrues a profit of one cent per day, i.e. 1%. Therefore, R100 left in the savings account will accrue imagined profit of 100 cents (R1) per day. If the R100 is left for 20 days in the savings account, the accrued imaginary ‘profit’ will be R20. If R50 is withdrawn, then according to the weird riba scheme, only the remaining R50 will earn ‘profit’ at the rate of 50 cents daily for as many days as the money is left in the account. This is pure riba of 1% of the savings per day.

Although Mufti Taqi has abortively attempted to show that the imagined ‘partnership’ subsists despite withdrawal of savings, the banks operating these rubbish so-called ‘islamic’ riba accounts, do not pay ‘profit’ on amounts which have been withdrawn. If 50% of the savings are withdrawn, the bank will pay imagined ‘profit’ (interest) on the 50% balance. If all the savings are withdrawn, the bank will not continue paying ‘profit’ (interest) despite Mufti Taqi’s claim that the partnership still exists in his “running musharakah” concept. Whilst the bank maintains the so-called musharakah/mudharabah account operative to facilitate daily withdrawals and deposits, the imagined ‘partnership’ practically ceases with each rand withdrawn and resumes with each rand deposited. This whole weird scheme is pure riba bunkum forged to deceive and mislead the ignorant masses.

Even if it should be assumed that at one stage, initially, the corrupt riba banks did actually calculate the profit in order to determine the 1% ratio with the rand, it is absolutely bizarre to imagine that the profit in future is constant. All factors which influence profit and loss are summarily ignored and the 1% per rand per day is proclaimed the holy writ, as if divine revelation has been received to this effect. Besides the gross deception, it is moronic to presume that for the next couple of years the profit will be the same as it had been at the initial stage or the pre-initial stage of the so-called investment. As far as the depositor is concerned, he makes no investment. The bank invests the savings on its own behalf. It pays the depositor fixed interest for his savings.

Muslims should not be pretend to be so stupid as to intentionally fall into this scheme of deception. Whatever so-called ‘islamic’ formula the banks or the ‘shariah’ boards of the banks which employ these scholars for dollars, forge is pure deception and baatil. In the current capitalist bank scenario it is impossible to operate a valid Islamic Shirkat or Mudharabat enterprise.

There are absolutely no valid Shar’i grounds for the claimed permissibility of the “running musharakah” scheme. It is baatil and haraam.

(16) In the penultimate paragraph of his article, Mufti Taqi reveals the objective for his ‘running musharakah’ endeavour. A Mu’min is supposed to underline his every pursuit with the objective of Ridha Ilaahi (Divine Pleasure). This is secured by meticulous obedience to the Shariah. The adoption of valid stratagems and circumventions which do not violate the Shariah is also discouraged in the absence of dire need. But in so far as baseless stratagems and circumventions of the Shariah are concerned – gimmicks and schemes which violate the principles of the Shariah – it is not merely an issue of discouragement. It enters the domain of prohibition, the adoption of which is haraam. There is absolutely no dire need for the haraam riba scheme which has been proffered in the guise of musharakah.

Stating the objective of his endeavour, Mufti Taqi says: “If the distribution on daily products basis is not accepted, it will mean that no partner can draw any amount nor can he inject new amounts to the joint pool.”

So what? The Shariah states that a partner may withdraw his capital with the consequence of termination of the partnership. This principle may not be violated.

As for injection of new capital, this is not prohibited. A new arrangement could be contracted to cater for the new introduction. The tenets of the Shariah do not stifle progress. But the progress must be based on permissibility not impermissibility.

Further expanding on his objective, Mufti Taqi says: “This arrangement is totally impracticable on the deposit side of the banks and financial institutions where the accounts are debited and credited by the depositors many times a day.”

This confirms that the actual objective is subservience to the riba banks and financial institutions of the capitalist kuffaar whose models and systems the Muslim banks have totally adopted. Mufti Taqi, with his running musharakah scheme is at pains to hammer out a hybrid system to primarily serve the interests of the western financiers – the banks and the financial institutions of riba.

The fact of daily debits and credits by depositors also confirms that the purpose of the deposits is not investment to gain genuine profit, but is savings to be utilized on a daily basis – savings which earn interest. The deceptive façade of ‘profit’ makes it attractive for the unwary, unsuspecting and ignorant masses to utilize the facilities of the financial institutions offering baatil ventures presented in Islamic guise. Fanciful Islamically sounding terms serve to bamboozle the masses. A valid Shirkat enterprise does not allow for daily withdrawal of capital investment. Such a measure defeats the very objective of the partnership.

Says Mufti Taqi: “The rejection of the concept of daily products will compel them to wait for months before they deposit their surplus money in a profitable account. This will hinder the utilization of savings for development of industry and trade, and will keep the wheel of financial activities jammed for long periods.”

The rejection of the baatil concept of “daily products” is simply Waajib for the many reasons elaborated in this discussion. Waiting for months to discover a profitable business enterprise for one’s surplus money is nothing out of the ordinary. It is simply necessary. Impatience does not justify transgression of the Shariah’s limits. Surplus money may not be invested in just any venture even if haraam, on the basis of a halaal enterprise not being available.

The problem with Muslims, and also lamentably with Mufti Taqi, is deficiency in Aqeedah, hence the fallacious idea that people will lose out if they do not invest immediately. Rasulullah (sallallahu alayhi wasallam) said: “Rizq is sealed, and the one of greed is deprived.” No amount of greed and haste to invest in just any confounded scheme hallucinated by brains gone haywire will increase a person’s predetermined Rizq, nor will withholding from investment decrease one’s Rizq. It is the Waajib Aqeedah of the Mu’min that Allah Ta’ala is the Sole Raaziq, and that his Rizq will reach him regardless of his efforts or abstention from effort. According to the Hadith, Rizq is inseparable from a person. It follows him like his shadow. When a man has consumed his final morsel of Rizq, his Maut arrives.

It is imperative to keep focus on this Aqeedah in the pursuit of Rizq. Wherever there is a clash between the demands of the Shariah and one’s worldly objectives, the bounden duty of the Mu’min is to cast aside the worldly objective and submit to the Shariah. After all, this is the purpose of our presence on earth. There will always be conflicts to test our Imaan. The type of sacrifice Mufti Taqi mentions if the baatil scheme is rejected, is in fact no sacrifice. On earth we have to offer sacrifices. In these times, Allah Ta’ala does not demand from us the super sacrifices which the early Muslims had to offer and suffer. In this era of Imaani weakness, our sacrifices are abstention from haraam, mushtabah, laghw and la’b – abstention from riba, insurance, bank products marketed as ‘shariah-compliant’, halaalized carrion and the plethora of doubtful foods – and abstention from emulating the kuffaar. We are not called on to sacrifice, home, property, family, land and life.

Aqeedah, Akhlaaq and Taqdeer may not be isolated from our monetary dealings. The Hadith informs us: “Verily, you have been created for the Aakhirah.” The minimum Waajib degree of Tawakkul – Waajib for every Mu’min – is strict observance of the Shariah, and to abandon whatever is in conflict with the Shariah. If abstention from haraam monetary dealings appears to bring poverty and hardship in its wake, let it be so. Accept it as the decree of Taqdeer. This is not advocating inertia, laxity and indolence. Aqeedah. Akhlaaq and Taqdeer are to sustain the Mu’min in a conflict situation.

Therefore, Mufti Taqi’s attitude projected in his idea of “waiting for months to profitably invest surplus funds, and of the “wheel of financial activities jamming”, is silliness unexpected of an Aalim of his status. It is ludicrous and haraam to forge by hook or crook a scheme to keep the wheel of the capitalist riba-devourers running, when the scheme is in stark conflict with the Shariah, but presented as a ‘shariah compliant’ product.

If abstention from the baatil “running musharakah’ scheme will “hinder the utilization of savings for development of industry and trade”, then let it be so. Muslim savings are not meant for promoting the riba empires of the capitalists, whether they be kuffaar or Muslims. Muslims should not regard themselves to be in need of the interest which the banks pay in the form of ‘islamic’ accounts of a variety of kinds. They should be content with whatever Allah Ta’ala bestows to them by way of halaal Rizq. There is considerable barakat in the little halaal they possess.

While it may be Mufti Taqi’s ambition to promote the banks, it is our duty to promote the Deen. His dalliance with the capitalist banks has desensitized in him the natural abhorrence which a Mu’min should have for these riba banks. Imaam Ghazaali (rahmatullah alayh) said that if there had to be trade and commerce in Jahannum, it would be the trade of banks (money-changers and money-lenders).

In the desperate desire to impose his baatil musharakah scheme on Muslims, Mufti Taqi laments: “There is no other solution for this problem except to apply the method of daily products for the calculation of profits…” There is no need for a solution, since in this context there is no problem. The problem is imaginary for Muslims. It could be a problem for the capitalists who require the savings of even the small man to finance huge business ventures. But withholding savings from deceptive ‘islamic’ bank accounts poses no problem for Muslims. The scheme formulated by Mufti Taqi is primarily designed for the interests of the riba capitalists.

“The truthful, honest trader will (on the Day of Qiyaamah) be with the Ambiya, Siddiqeen and the Shuhada.” (Hadith)

The Concept of Limited Liability (LLP) — Untenable in The Shariah

By Mujlisul Ulama


“Verily, Maut (Death) does not absolve the debtor from debt. It is for this reason that the debt will be demanded from him in the Aakhirah. There is consensus (Ijma’) on this.” (Musallamuth Thuboot)


“The greatest (worst) of sins after the major sins prohibited by Allah, with which a servant (of Allah) will meet Allah is that a man dies saddled with debt for which he has not left assets to pay it.” (Al-Jaamius Sagheer)

The concept of juridical person and the idea of limited liability are cornerstones of the western capitalist economic system. Simply and truly a ‘juridical person’ is a non-existing or imaginary person created by  western law. This imaginary or fictitious person is regarded as a legal entity supposedly having transacting and contractual ability and powers in the same or in almost the same way as a real, living human being. It is a ‘person’ existing on paper and in relation to the word ‘person’ it is pure fiction.

Although the ‘juridical person’ is acknowledged and understood to be a figment of the imagination of men, it is nevertheless accorded some consequences in the capitalist system of economics. The two main consequences of the fictitious man created by western economists are:

(1) The acquisition of capital from investors
(2) Insulating the partners of the business enterprise against the debt they owe their creditors. This safeguard which the ‘juridical person’ provides is termed the ‘principle of limited liablity’.

In terms of this principle if the business suffers a loss or  becomes insolvent the partners or shareholders are absolved of  their debts. The rights of creditors extend to only the amount which the shareholders have invested and whatever assets are registered in the company’s name. Beyond the assets of the fictitious person,  the creditors have no claim whatsoever. They have to suffer and write off the debts even if the partners and the actual contractors/transactors who happen to be shareholders enjoy the bounty of enormous wealth in their personal names.


The theory of absolution from debt, that is, to be absolved of debt without payment or a wholehearted waiver by the creditors, is a kuffaar concept alien and unacceptable to Islam. Not only fictitious entities, the so-called juridical persons, but even living persons are absolved of their debts by virtue of the insolvency law of the western kuffaar. Thus, when a man is declared insolvent and all his assets have been possessed and disposed of to pay his creditors, he is  totally set free from all remaining debts. Thereafter when he again acquires wealth, even millions, his creditors have no right in terms of western kuffaar law to pursue him for demanding what he owes them.

This same theory of arbitrary and legal absolution of debt, which denies the rights of the creditors, is extended to the fiction called ‘juridical person’. When a company (the fictitious entity) is declared insolvent, the claim of the creditors is limited to the assets registered in the name of the fictitious person or the ‘juridical person’ in the terminology of the capitalists. The debts are simply written off and cannot be claimed from anyone. Those who had incurred the debt are let off the hook to go free to earn and become rich while those who have huqooq  (rights), namely, the creditors, have to simply relinquish their rights and claims under duress of kuffaar economic laws.

In his book, An Introduction To Islamic Finance, Hadhrat Mufti Taqi Uthmaani of Pakistan, presents argument in favour of the absolution of debt, juridical person and limited liability concepts of the western capitalists.


In his argument, he firstly presents the concept of juridical person. Henceforth we shall refer to the juridical person as the fictitious person, for it is nothing other than a figment of the imagination of the kuffaar. According to the venerable Mufti Saheb, the concept of ‘limited liability’ which gives rise to arbitrary absolution from debt, is the logical consequence of the concept of the fictitious person. Therefore, if sanction for the fiction can be acquired from the Shariah, then the concept of limited liability with its absolution from debt will be a logical necessity.

Outlining his postulate, Mufti Taqi Saheb states:

“The basic question, it is believed, is whether the concept  of a juridical person is acceptable in the Shariah or not. Once the concept of ‘juridical person’ is accepted and it is admitted that, despite its fictive nature, a juridical person can be treated as a natural person in respect of the legal consequences of the transactions made in its name, we will have to accept the concept of ‘limited liability’ which will follow as a logical result of the former concept.”  

The ‘logical result’ postulated by Mufti Taqi Saheb will be correct if the Shariah is made subservient to the laws of the kuffaar economists who fabricate theories  and laws according to their thinking. Assuming that the concept of a fictitious person does exist in Islamic Law independently from kuffaar economic law, then too there is no logical necessity to latch onto this concept the idea of limited liability and arbitrary absolution from debt. Limited liability and automatic absolution from debt as logical consequences of the fictitious person theory will have to be proven on the basis of Shar’i evidence. It is a mere arbitrary conclusion to assert that if the concept of a ‘juridical person’ is accepted, then liability and arbitrary absolution from debt are logical consequences. There is no basis and no proof for this other than to tender the assertion that according to western economic law limited liability is inseparable from the concept of a ‘juridical person’. But this hypothesis is baseless in the Shariah and repugnant to Islamic intelligence.

Hadhrat Mufti Taqi Saheb, as substantiation for his claim of ‘logical result’, argues that:

“The reason is obvious. If a real person, i.e. a human being  dies insolvent, his creditors have no claim except to the extent of the assets he has left behind. If his liabilities exceed his assets, the creditors will certainly suffer, no remedy being left for them after the death of the indebted person.”  

The presentation of this analogy in support of the contention that limited liability is a logical consequence of the concept of the fictitious person indeed staggers the mind.

There is absolutely no scope for the general idea of limited liability and absolution of debt in the effect and consequence of the insolvent estate of the deceased.

In respect of the insolvent estate of a deceased, the question of ‘limited liability’ simply does not feature. The creditors cannot claim from persons other than the deceased because  others are not the debtors. The rights of the creditors are restricted to the assets of the person who is the true debtor, namely, the deceased. The creditors cannot claim from the heirs for the simple and obvious reason that they are not the debtors and they inherit no part of the insolvent deceased’s assets which will be entirely possessed by the creditors.

Furthermore, the unfulfilled amount of the debt is not waived nor arbitrarily cancelled by the Shariah. It does not follow from the insolvent estate of the deceased that he is automatically absolved  from his debt. The claim and rights of the creditors remain valid and will extend right into the Aakhirah where they will be entitled to lodge their claims and demand payment or fulfillment of their rights in the Divine Court which is NOT a fictitious institution like the kuffaar concept of a ‘juridical person’. The Divine Court has greater reality than this material world in which we live. Hadhrat Mufti Saheb is fully aware of the consequences of unpaid debt, especially if the non-payment is willful. The rights and demands of creditors  —  even non-Muslim creditors  — will be satisfied and fulfilled in full measure in the Divine Court on the Day of Qiyaamah. 

The Divine Court, the Aakhirah and Allah Ta’ala are inseparable from the Muslim way of life and thinking. These fundamental  Entities are REAL and a Muslim is not allowed to formulate laws, theories, etc. in isolation from these REAL Entities.


Hadhrat Mufti Taqi Saheb presents the following Shar’i masaa-il in substantiation of the western concept of the fiction called ‘juridical person’ which is a legal entity supposedly possessing all contractual powers and abilities which a real human being is capable of in Islam:

(1) Waqf
(2) Baitul Maal
(3) Joint Stock  
(4) Inheritance under debt
(5) Al-Abd-ul Ma’zoon

Insha’Allah we shall proceed to discuss each one of these examples which the venerable Mufti Saheb presents as his basis for the validity and Shar’i acceptability of the capitalist system of ‘juridical person’ with its consequence of limited liability and arbitrary absolution of debt.

(1) WAQF

Presenting his daleel (evidence/proof/basis), Hadhrat Mufti Sahib states:

“The first precedent is that of a Waqf. The Waqf is a legal and religious institution wherein a person  dedicates some of his properties for a religious or a charitable purpose. The properties after being declared as Waqf, no longer remain in the ownership of the donor. The beneficiaries of a Waqf can benefit from the corpus or the proceeds of the dedicated property, but they are not its owners. Its ownership vests in Allah Almighty alone.”  

After presenting the definition of a Waqf in terms of the Shariah, Hadhrat Mufti Taqi Saheb lapses into the following incongruous averment:

“It seems that the Muslim jurists have treated the Waqf as a separate legal entity and have ascribed to it some characteristics similar to those of a natural person.”  

In substantiation of this incongruity, the Mufti Saheb presents the following argument:

“This will be clear from two rulings given by the fuqaha (Muslim jurists) in respect of Waqf. Firstly, if a property is purchased with the income of a Waqf, the purchased property cannot become a part of the Waqf automatically. Rather, the jurists say, the property so purchased shall be treated as a property owned by the Waqf. It clearly means that a Waqf, like a natural person, can own a property.”

Secondly, the jurists have clearly mentioned that the money given to a mosque as  a donation does not form part of the Waqf, but it becomes in the ownership of the  mosque.”  


Assets purchased with the income of a Waqf do not become part of the original Waqf property for the simple reason that for anything to become Waqf there has to be a Waaqif (a human being who dedicates the asset in the Path of Allah as Waqf). In this case, the purchased asset has no  Waaqif. The Waaqif of the Waqf property specifically and expressly made the property Waqf so that it could be employed to generate income for distribution to whatever charitable cause he (the Waaqif) had designated. If the income of the Waqf too has to become Waqf automatically, the very aim and purpose of the Waqf will be defeated and it will be devoid of utility.

For his claim that the property purchased with the income of the  Waqf will be a property owned by the Waqf, Mufti Taqi Saheb cites   ‘Al-Fatawa al-Hindiyyah, ch.5, v.2, p.417’. For better understanding of this issue, we cite the relevant text to which Mufti Taqi Saheb has referred:

“When the mutawalli (trustee) of a Musjid purchases a shop or a house with the money of the Musjid, then sells it, it (the sale) is permissible if he has the authority of purchasing. This mas’alah is actually based on another mas’alah, namely, Does the house or shop purchased by the mutawalli with the income of the Musjid become consolidated with the property which were made Waqf for (the expenditure) of the Musjid? In other words, does it become Waqf? The Mashaaikh (Fuqaha) – Rahmatullah alayhim — differ in this regard. Sadrus Shaheed said that the preferred  view is that it will not be consolidated (with the original Waqf property), but will become income for the Musjid. So is it expressed in Al-Mudhmaraat.”  

In this reference there is no mention made of the purchased property being owned by the Waqf. The Shar’i law simply states that the property bought with the income of the Waqf does not become Waqf. It forms part of the income which has to be expended in accordance with the directive of the Waaqif. The issue of ownership does not arise at all.

The statement of the Fuqaha , namely, ‘At-tamleek lil Musjid’  which appears in I’laaus Sunan and other Kitaabs does not have the meaning of a ‘juridical person’ or a fictitious person as the capitalist concept propounds. Ownership of the Musjid in this context means ownership of the Owner of the Musjid. He Who is the true owner of the Musjid becomes likewise the owner of all assets made Waqf for the expenditure of the Musjid, and of all income generated by these Waqf assets.

Who is the owner of the Musjid? Hadhrat Mufti Taqi Saheb himself makes explicit reference to the owner of the Musjid, in fact to the owner of all Waqf property of any kind whatsoever. Thus, Mufti Saheb states in his book:


This is not a fictitious being. Allah Ta’ala is the only Being Whose existence is REAL. His Reality is true Reality, greater than all other realities created by Him. Let us see what the Fuqaha (Jurists of Islam) say about the ownership of a Musjid and of Waqf property.

(1) “Abu Yusuf and Muhammad said that Waqf in the Shariah is the retention of an object (or property) in the legal category of it being in the ownership of Allah Ta’ala in such a way that the benefit (of the Waqf asset) reaches the servants (of Allah). Thus the ownership of the Waaqif  terminates and  passes to Allah Ta’ala. It is therefore absolute. It cannot be sold, nor pawned, nor inherited.” (Al-Jauharatun Nayyirah, page  21, Part 2)

(2) The same definition as above. However, in the consequence of the Waqf its is said: “It cannot be sold nor gifted away nor inherited.”

(3) According to one opinion of Imaam Muhammad and Imaam Abu Hanifah, the issue of ownership is described as follows            

“Verily, the demand (effect) of Waqf is the elimination of ownership (of the owner) without  tamleek .” (Hidaayah, Volume 1)

In other words, when the  Waaqif’s ownership is terminated by virtue of Waqf, there is no logical necessity for the Waqf asset to enter into the ownership of another human being as some Fuqaha aver. The ownership of Allah Ta’ala is Real, legal and adequate. It is not a stratagem of fiction as the western concept of ‘juridical person’ which has no reality whatsoever.

(4) Verily, there is the need for the Waqf of the Waaqif to become absolute so that its thawaab accrues to him perpetually. And, this need can be fulfilled (by the  Waaqif) terminating his ownership and making over ownership to Allah Ta’ala. For this there is a precedent in the Shariah, namely, the Musjid. Hence, it (the Waqf) shall simply be effected in this way.” (i.e. There being no need for any human being to assume ownership). (Hidaayah, Vol.1, page 617)

(5) “The (Waqf) property is the haqq of Allah Ta’ala.” (Hidaayah, Vol.1, page 622)

Our Fuqaha unanimously proclaim that when the Waqf is validated, ownership passes to the Original and True Owner, namely, Allah Ta’ala. Validation of the Waqf takes place in different ways according to the different Fuqaha. There is no need to elaborate this point here because it is beyond the scope of our discussion.

It will suffice to say that our Fuqaha do not assert that the Waqf has no owner. They are explicit in stating that Allah Ta’ala is the owner. The meaning of the averment of some Fuqaha that the Waqf property after leaving the ownership of the Waaqif  does not enter into the ownership of anyone, is that it does not become the property of any human being. The Waqf asset will be used according to the directive of the Waaqif for the beneficiaries of the Waqf. However, it does not follow from the termination of the Waaqif’s  ownership that the Waqf asset has absolutely no owner. Neither is this a Shar’i conclusion nor a logical consequence of Waqf. On the contrary the Shariah is explicit in its ruling that Allah Ta’ala is the Owner of the Waqf.

This Shar’i ruling effectively negates  the idea of the Waqf being a fictitious entity/person like the western kuffaar concept of ‘juridical person’. By what stretch of Shar’i reasoning can it be claimed that Waqf is similar or almost identical to the western concept of a fictitious person when the Shariah emphasises the real ownership of the Waqf? Is it Islamic to negate Allah’s Ownership for relegating Waqf to  the limbo of fiction merely for substantiating the kuffaar concept of ‘juridical person’?

The Fuqaha are the Jurists of Islam and their preserve is Fiqh or Islamic Jurisprudence. They did not deal in allegory. They do not present metaphorical and figurative interpretations and arguments. Their arguments are cold, logical and rational facts based on the Qur’aan and Sunnah. So when they aver that ownership of a property reverts to Allah Ta’ala, their averment is in the literal and legal sense. It is therefore baseless to conclude from the termination of the  Waaqif’s ownership that  some fictitious person assumes ownership like the fiction fabricated by the kuffaar economists.

There is not an iota of Shar’i evidence to substantiate the assertion that “it seems that the  Muslim jurists have treated the Waqf as a separate legal entity and have ascribed to it some characteristics similar to those of a natural person”.

What exactly are these characteristics which the Fuqaha have ascribed to a Waqf to justify dubbing it a ‘juridical or legal entity’? We have already shown that a Waqf is not a separate legal entity in the way the capitalist system  regards its fictitious ‘juridical man’. Allah Ta’ala is the Owner. This indisputable Shar’i fact and reality utterly negate the claim of a Waqf being a fictitious person having rights and powers similar to a natural person.


How can one Waqf asset or property own another property when Allah Ta’ala is the owner of the Waqf asset? In fact, this  conclusion militates against even the concept of juridical person because according to this fiction of the capitalists, the ‘juridical person’ or the separate legal entity is not the tangible asset or the property or the capital invested. All these items are the assets of the juridical person. Who is this phantom described as the ‘juridical person’? It is the legal document which has been registered with the authorities of the land. This piece of paper which has been legally transformed into a ‘juridical person’ owns the assets of the company. The assets are not the juridical company.

But in the Islamic concept of Waqf, there is no such document which the Shariah elevates to the pedestal of an  Aaqil (sane human being) and Baaligh (an adult  natural human being — Insaan).   A Waqf document in the first place is not a requisite for the validity of Waqf. Even if a document (Waqf Naamah) is drawn up, it (the document) is never regarded in Islam as an entity with contractual powers, rights, obligations and abilities.  Even a natural human being lacking in the two imperative conditions of aql (sanity) and buloogh (adulthood) is estopped by the Shariah from contracting and transacting. Thus a minor and an insane person are not permitted to transact, contract and deal in commerce and trade.

If it is argued that since a lawful guardian or an appointed curator can act, transact and contract on behalf of a minor and an insane person, we can apply the same rule to a juridical person who can be represented by the directors of the company, we shall refute this argument. In the former instance, the guardian/curator represents a real and a natural human being while in the latter case the directors represent a fiction — an imaginary chap — a phantom, a piece of paper. In terms of the Shariah such fictitious representation is baseless. Islam does not condone falsehood, especially falsehood  and fiction conjured for usurping the huqooq (rights) of the creditors.

Representation, that is, to be an agent of another, for its validity requires two fundamental conditions.

(1) That the Muakkil (the principal) and the Wakeel (the agent) should be sane and adult human beings.

(2) That the Wakeel assumes agency in a matter which the Muakkil himself is capable of executing. 

Both these conditions are lacking in the representation of the juridical person who is supposedly the Muakkil by the directors who are the agents of the fictitious Muakkil.  

There is no similarity of characteristics between the fictitious ‘juridical’ creation of the capitalist economic system and a Shar’i Waqf. While the fictitious legal ‘person’ is a document, Waqf is a tangible asset. Without the asset, there is no Waqf. But without assets, this figment of man’s imagination has been given legal sanction and elevated to the pedestal of a natural man in several aspects. The existence of Waqf hinges on a tangible asset while the ‘juridical person’ can exist without assets.

The ‘juridical’ paper-man can dispose of all its assets, but not so with Waqf. The Mutawallis (trustees) of the Waqf asset, i.e. the original asset which constitutes the Waqf, cannot dispose of it in any way whatsoever. The Shariah declares: “The Waqf asset cannot be sold nor given away, nor pawned, nor inherited.” The ‘juridical person’ can be annihilated, not so the Waqf property. The Waqf remains until the Day of Qiyaamah.

Like an animal cannot own money, so too can a stone not own money. Only Insaan (the human being) can own money. The conditions for ownership according to the Shariah do not exist in animals and stones and all lifeless objects. Thus, the Musjid property does not have the capacity of ownership in the meaning of ownership as related to insaan (man). That ownership of a Musjid is vested in Allah Ta’ala Alone, is irrefutable. Hence when it is said that the carpets belong to the Musjid, the money belongs to the Musjid, etc., it is meant thereby that all such assets are in the ownership of the Owner of the Musjid and have to be utilized exclusively for that particular Musjid. This obvious and logical conclusion is corroborated by the explicit declaration of the Fuqaha that Allah Ta’ala Alone is the Owner of the Musjid. Even Mufti Taqi Saheb concedes this fact. It is therefore a self contradiction to claim that ownership of the Waqf vests with Allah Ta’ala, and the income generated by the Musjid’s Waqf properties belong to the Musjid. The absurdity of this claim is self-evident.

The very same jurists who say that a Musjid can own assets, affirm that ownership of the Musjid is vested in Allah Ta’ala. From this averment it should be clear that their statement is not in negation of Allah’s Ownership. Most certainly, they do not propound the theory of partnership between Allah Ta’ala and the Musjid property. They do not ascribe the Shariah’s concept of ownership as related to insaan (man), to inanimate structures.


Mufti Taqi Saheb says:

“Another Maliki jurist, namely, Ahmed Dardir, validates a bequest made in favour of a mosque, and gives the reason that a mosque can own properties.”  

We fail to understand why Hadhrat Mufti Taqi Saheb who is a Hanafi had to cite “another Maaliki jurist” when even the Ahnaaf validate bequests for a Musjid. A wasiyyat made for a Musjid is simply a directive by the  moosi (the one who makes the bequest) to spend a certain sum of his money for the upkeep of the Musjid. There is no need to fabricate concepts of fiction for the execution of this simple directive. A mutawalli simply keeps in trust the bequeathed amount and utilizes it for the maintenance of the Musjid. What this has to do with the fiction of a juridical man defies imagination. Support for the creation of a phantom cannot be eked from the validity of a bequest for a Musjid. Monetary contributions bequeathed for a Musjid are like the contributions made  by a living person. All such contributions are for the upkeep of the Musjid. The issue of ownership plays no role in  obtainal of the discharge of the bequest.

Mufti Saheb makes the following conclusion:

“It is clear from these examples that the Muslim jurists have accepted that a Waqf can own properties. Obviously, a Waqf is not a human being, yet they have treated it as a human being in the matter of ownership.”

What Mufti Taqi Saheb claims is not at all clear from the examples he has tendered. From the examples he has cited there does not emerge the consequence that the Musjid building becomes an owner of wealth in the same way as a human being. The wealth and assets of the Waqf are held in trust by Mutawallis on behalf of the True Owner, Allah Ta’ala.

It is also the contention of the venerable Mufti Saheb that the principle of limited liability is a logical consequence of the juridical person concept. If juridical person is accepted, then limited liability has to be necessarily and logically accepted. Now in Mufti Taqi’s view, the Musjid or any other Waqf property is a ‘juridical’ person. Thus should follow the limited liability effect. How will limited liability apply to the Waqf property? The Waqf property (which is a tangible asset, not a piece of paper), does not have shareholders from whom it has borrowed money which constitutes its capital nor does it have creditors who could be thwarted by some limited liability principle.

If the Mutawalli was constrained to incur debt for the upkeep of the property, the creditor is not encumbered by any limited liability device in favour of the Waqf asset nor by the arbitrary absolution of debt rule. The Owner of the Musjid/Waqf permits the creditor to receive full payment from the income generated by the Waqf. The debt cannot be arbitrarily written off by declaring the Waqf asset insolvent.

Arguing in favour of the western concept of the fictitious person, Mufti Taqi Saheb states:

“Once its ownership is established, it will logically  follow that it can sell and purchase, may become a debtor and a creditor and can sue and be sued, and thus all the characteristics of a ‘juridical person’ can be attributed to it.”  

Undoubtedly, ownership of the Waqf is established. It is established by the Shariah as we have explained in the aforegoing pages, that Allah Ta’ala is The Owner — the Real Owner of the Musjid or of the Waqf property. Therefore, the conclusion that the Waqf property itself can transact and contract is absurd. The inanimate stone building cannot act, contract and transact. The Mutawalli buys and sells for the upkeep of the Waqf property. He does not buy and sell on behalf of the inanimate stone structure. He is not the wakeel (agent) of the property. He simply uses the income of the Waqf for the welfare and upkeep of the building and its administration. These acts and transactions by the Mutawalli have no relationship with any ‘juridical person’ who is devoid of reality. The Owner of the Waqf Property  has empowered the Mutawalli through the medium of His Shariah to act in the best interests of the Waqf property.

If the owner instructs a painter to paint his property, there is no need for the superfluity of saying that the stone building is a ‘juridical person’ who has instructed the painter via the agency of the owner to paint the house. This is preciscely what Hadhrat Mufti Taqi Saheb avers inspite of his awareness that Allah Ta’ala is the Real owner of the Musjid property and that it is not the Musjid property (the stone structure) which acts and transacts, but it is the Mutawalli (Trustee) who deals with the affairs of the Waqf properties in accordance with the Commands of Allah Ta’ala. A real, natural human being (the mutawalli) acts on behalf of The Real Being, Allah Ta’ala Who is the Owner of the Waqf property. Thus, there is no resemblance between a Waqf and the fiction of ‘juridical person’.

Mufti Taqi Saheb further claims:
“The liquidation of a company corresponds to the death  of a person, because a company after its liquidation, cannot exist any more. If the creditors of a real person can suffer, when he dies insolvent, the creditors of a          juridical person may suffer too, when its legal life comes to an end by its liquidation.”  

What is the basis for the  claim that if the creditors of a real person can suffer then likewise the creditors of a juridical person should suffer. There is absolutely no link between the two. By the terms “can suffer” the inference is automatic absolution of debt.  But there is no such a Mas’ala in the Shariah hence it cannot be cited as a primary premiss (Asl or Maqees alayh) for the extension of a Shar’i Hukm to a new contingency which in this case is the absolution of debt in relation to the fictitious person.

There is absolutely no evidence in the Shariah for justifying the argument that the legal liquidation of a company in terms of kuffaar law is akin to natural death of a natural human being. If a Musjid is demolished, it cannot by any stretch of Shar’i argument be compared to the death of a human being. To a far greater degree will the laws applicable to the death of a human being not apply to the demolition of a Waqf property or the dissolution of a Shar’i partnership (Shirkat) enterprise.

Shirkat and Mudhaarabah (Partnership enterprises) are valid Shar’i forms and systems of trade. By some crooked type of reasoning and reckless interpretation, it may be argued that a Western company resembles Shirkat. Many Ulama too are confused on this issue and accept that a company owned by the fictitious juridical fellow is a valid Shar’i Shirkat enterprise. Hence they apply all laws of  Shirkat to the juridical phantom except debt. As far as debt is concerned they introduce the kuffaar principle of limited liability which is not an effect of Shar’i Shirkat. Therefore, if Hadhrat Mufti Saheb had rather claimed that the liquidation of a company corresponds to the liquidation of the Shirkat enterprise, then there would have been some superrficial façade of a seemingly ‘valid’ argument. But the averment that “the liquidation of a company corresponds to the death of a person”, is absurd. It is utterly devoid of substance.

There is also no grounds in the Shariah for the claim:

“If the creditors of a real person  can suffer when he dies insolvent, the creditors of the juridical person may suffer too when its legal life comes to an end by its liquidation.”

On what Shar’i grounds is this hypothesis based? When there is no such concept as a ‘juridical person’ in Islam, it is ludicrous to extend the consequences of the death of a real person to a fictitious person. On the other hand, if the Shariah validates the concept of a fictitious person having contractual and other powers of a human being, such a concept would have been known to the Fuqaha from the very initial stage of Islam. But there is not the slightest and flimsiest shred of evidence to back up the concept of the ‘juridical person’.

This concept is particularly vulgar and fraudulent in view of the fact that the effect of absolution of debt attributed to it is designed to circumvent and deny payment  of debt. This is a vile denial having grave and painful consequences in the Aakhirah.  The attitude of Islam towards payment of debt and denial of the rights of others is too well known to require elucidation.

If creditors are constrained to suffer on account of the death of a person, what logical and Shar’i need is there for them to suffer when all the contractors, partners and shareholders of the liquidated company are living and enjoying their wealth and properties?

It is important to understand that  the ‘suffering’ caused to creditors when the estate of the deceased is insolvent is temporary. Insolvency in Islam does not give rise to absolution of debt. The debtor remains liable his entire life. He has to work and pay. If he fails to settle his debts,  the claim of the creditors is not arbitrarily waived. Their claims will extend into Qiyaamah where they will have the right and the ability to apprehend the debtor and haul him into the Divine Court where he will have to pay with the currency of the Aakhirah.

While the Belief or Concept of Aakhirah may seem remote to those anchored in materialism and the pleasures of this world, it is not a fiction like the phantom they dub ‘juridical person’ manufactured to rob the creditors. If the fiction of the ‘juridical person’ is rational, intelligent, beneficial and acceptable to the minds of the liberalists, then the concept of the extension of creditors’ claims into the Aakhirah should pose no difficulty for their comprehension. This is so because after all, inspite of being liberal, they do have yaqeen in the Aakhirah and in all the pronouncements of Rasulullah (sallallahu alayhi wasallam). Among the teachings of the Rasool is the tenet that there is no  automatic or arbitrary absolution from debt and that the creditors will enjoy the right of demanding their huqooq in the Court of Allah Ta’ala.

It is therefore erroneous for Mufti Taqi Saheb to say that if the creditors of a person can suffer then the creditors of the fictitious person can also suffer. Firstly, the ‘suffering’ of the creditors is temporary and depending on the degree of their Sabr, it is wonderfully rewarded. Secondly, the creditors are encouraged by the moral code of Islam to wholeheartedly waive the debt. If they choose this option, the ‘suffering’ is completely  eliminated and substituted with the pleasure of the awareness of enormous thawaab in the Aakhirah and barkat in this world.
The creditors therefore will not suffer any loss irrespective of the deceased’s estate being insolvent. What happens when a person is declared insolvent, whether he remains alive or has died, is that payment of debt is deferred to a later time. It is not waived. But in terms of the kuffaar concept of juridical person, the debts are written off and creditors are deprived of their rights. Islam regards this set up with repugnance. The Qur’aan and Ahaadith bear ample testimony to the evil of usurping the huqooq of others, and to the dire consequences which ensue in the wake of such usurpation.


Hadhrat Mufti Saheb’s second example for justifying and providing Shar’i validity for the juridical person and limited liability ideas is the Baitul Maal or the state treasury or the vaults and safes and boxes in which the government stores the funds which have to be utilized for state expenditure. In the endeavour to justify the ‘juridical person’, Mufti Saheb avers:

“Another example of juridical person found in our classic literature of Fiqh is that of the Baitul-mal (the exchequer of an Islamic state). Being public property, all the citizens of an Islamic state have some beneficial right in the Baitul-mal, yet, nobody can claim to be its owner.”  

The Baitul Maal simply consists of the state vaults in which the revenue collected by the state is stored. The funds kept in the boxes have to be distributed and spent in accordance of the Shariah by the Islamic Ruler who is the guardian of the funds. In his capacity as the representative of Allah Ta’ala he spends the money according to the instructions of Allah’s Shariah. The question of ‘juridical person’ for achieving fulfilment of the Shariah’s instructions pertaining to these funds does not arise. In fact it is absurd.

The funds in the Baitul Maal are of a variety of categories. Some funds according to the Shariah have to be distributed in some specific avenues and may not be utilized for a different expenditure. To achieve this, a ‘juridical person;’ is not needed. The Khalifah who is the Guardian of the funds has the duty and obligation to ensure correct Shar’i disbursement of the money, etc. The Shariah empowers the Khalifah to take funds of a particular designation to spend it in another avenue if the need arises. This is the right conferred to the Khalifah, not to the inanimate money kept in the vaults.

Mufti Saheb cites the following statement:

“If the head of an Islamic state needs money to give salaries to his army, but he finds no money in the Kharaj department of the Baitul-mal (wherefrom the salaries are generally given) he can give salaries from the sadqah department, but the amount so taken from the sadqah department shall be deemed to be a debt on the Kharaj department.”  

The Shariah has ordained different classes of wealth such as Zakaat, Kharaaj, Sadqah Naafilah, Khums, etc., etc. These funds have to be expended in different avenues or for different purposes. If, for example, Zakaat money is used to construct a Musjid, the obligation of Zakaat will not be discharged. If Zakaat money is thus spent in a category of expenditure which does not result in the discharge of the Zakaat obligation, it (Zakaat) will have to be made good by person who had used the funds for another purpose. This is not exclusive with the Baitul Maal. This law applies to everyone.

The Khalifah is empowered by the Shariah to take money from one category of funds and utilize it for a different purpose other than for what the money has to be used for according to the Shariah. But  in relation to the Khalifah such use is not misappropriation because the Shariah permits this. However, when later funds of the particular kind are received, the Khalifah has to replace it to ensure that correct distribution is achieved. It is simply an issue of replacing the funds which the Khalifah had borrowed by virtue of the right the Shariah has given him. The inanimate vaults in which are kept the funds  do not lend. It cannot lend. It is not an  aaqil, baaligh insaan  who has the capacity and ability to transact and contract.  

The statement that the amount which the Khalifah took from the Zakaat vault, for example, is a ‘dain’ (debt) on the Kharaaj vault does not mean ‘debt’ in the legal and technical sense of the Shariah. For the validity of such debt the essential conditions are aql (sanity) and buloogh (adulthood). Furthermore, the substratum of these two essential conditions is insaan (the human being). An animal cannot transact, contract, lend, borrow, etc., notwithstanding the existence of these two conditions in it. To a greater degree will this ruling apply to an inanimate object such as money or the vaults in which the money is stored.

For the execution of his obligations and acting according in accordance of his rights, the Khalifah of the Islamic state is not in need of any ‘juridical’ or fictitious person. The Shariah does not need to present such a phantom for the simple reason that the Khalifah is empowered to utilize the state funds according to his discretion within the bounds prescribed by the Shariah. By Baitul Maal is meant the material building where the funds  are stored. It does not mean anything else. It is therefore ludicrous to force the Baitul Maal into the meaning of the western idea of ‘juridical person’.

The inanimate vaults and boxes and the building in which these items are housed have no contractual power and ability. These inanimate objects cannot trade, sue and get sued. If the Khalifah does not replace the funds from the vault from where he acquired it or he is unable to replace the borrowed money, the Baitul Maal cannot sue him. If the ruler misappropriated someone’s wealth and  unlawfully deposits it into the safe-boxes stored in the building, there is no ‘juridical person’ to be sued. The mazloom  (oppressed one) can petition the Islamic court to compel the ruler to return his property. The action will be against the ruler, not against the building where the ruler happens to have stored the misappropriated wealth.

It is an irrefutable Shar’i fact that Islam does not accept the arbitrary or automatic absolution of debt idea as conceived by the insolvensy law of the kuffaar. Islam clearly states that the debtor  remains liable for his debt for all time. If he is unable to pay his debtors here on earth, he will have to satisfy them with the currency of the Aakhirah in Qiyaamah where he will stand trial in the Divine Court. A necessary attribute of debt is its perpetuity until the debtor is absolved either by payment or voluntary absolution by the creditor. But this rule of debt does not apply to the Khalifah who ‘borrowed’ from one vault to use in another avenue of expenditure. If funds to make good the amount taken are not available, the Khalifah will not be held liable in the Divine Court nor can he be held liable on earth. Inspite of the ‘debt’ he is not liable because he is no the debtor. The ‘debt’ thus taken is not a true debt in the sense defined by the Shariah. 

How will one department of the Baitul Maal sue another one of its own departments (boxes/vaults)? Who will do the suing? If the Khalifah cannot find funds to replenish the money he had appropriated and the so-called department in the Baitul Maal is bankrupt, will the specific department or the entire Baitul Maal be declared legally insolvent and  legally dead, thus compelling the Khalifah to close shop and put the Baitul Maal into extinction? The incongruity of the endeavour to create a hybrid system (an admixture of the kuffaar system with the Islamic system) is a miserable absurdity.

The Baitul Maal in terms of the explanation proffered by Hadhrat Mufti Taqi Saheb is supposed to be a separate legal entity or a juridical person like a company.  But can a company sue its own assets or any of its own departments? The claim that one department of the Baitul Maal (the supposed juridical person) is indebted to the other department in the way in which debtors are indebted to a company, leads to the absurd conclusion that some assets of a company can sue other assets of itself. In other words the juridical person is indebted to itself and can sue itself. In short it can commit suicide.

The Khalifah does not represent the Baitul Maal. He does not contract on behalf of the Baitul Maal which has no such capacity. He represents Allah Ta’ala and acts in terms of the mandate assigned to him by Allah Ta’ala. The Khalifah is not in need of a concept such as ‘juridical person’ to carry out his mandate. The juridical person is a creation of the west, and it has specific aims as its object. In the mind of the western man some legality has to be accorded to denial of execution of the liability of debts in order to attract capital. For achieving this aim, the fictitious person was brought into being. When this juridical phantom is legally killed, the rights of the creditors are extinguished.

Muslims who are conscious of the need to submit to the Shariah are not in need of any fictitious person to enable them to trade and attend to all affairs related to trade and commerce. The Shariah has made ample provision for this, and there is no need to introduce a concept/system of the kuffaar. Above all, there is no basis in the Shariah for granting it Shar’i acceptance.


Hadhrat Mufti Taqi Saheb states:

“Another example very much close to the concept of  juridical person in a joint stock company is found  in the Fiqh of Imam Shafi’i. According to a settled principle of Shafi’i School, if more than one person run their business in partnership, where their assets  are mixed with each other, the Zakah will be levied on each of them individually but it will be payable on their joint-stock as a whole, so much so that even if one of them does not own the amount of the nisab, but the combined value of the total assets exceeds  the prescribed limit of the nisab, Zakah will be payable on the whole joint-stock including the share of the former, and thus the person whose share is  less than the nisab shall also contribute to the levy in proportion to his ownership in the total assets, whereas he was not subject to the levy of Zakah had  it been levied on each person in his individual capacity.

The same principle which is called khultah-alshuyu’ is more forcefully applied to the levy of Zakah on livestock. Consequently, a person sometimes has to pay more Zakah than he was liable to in his individual  capacity, and sometimes he has to pay less than that. “This principle of Khultahal-Shuyu’ has a basic  concept of a juridical person underlying it. It is not  the individual, according to this principle, who is liable to Zakah. It is the joint-stock which has been made subject to the levy. It means that the  joint-stock has been treated a separate entity, and the obligation of Zakah has been diverted towards this entity which is very close to the concept of a juridical person, though it is not exactly the same.”  

According to the reasoning presented in the aforegoing explanation, “the obligation of Zakah has been diverted towards this entity”, i.e. to the joint stock which has been termed the juridical person. Prior to the admixture of the stocks, the obligation of Zakaat was the responsibility of the individual, i.e. the person who is the owner of the assets. After the stock of two persons has been mixed, the obligation of Zakaat according to Hadhrat Mufti Taqi’s reasoning is diverted from insaan (the human being) to the inanimate stock, be it wheat, rice, sugar, money, etc., etc. When the incidence of mixture of two assets takes place, the human beings who are the actual and true owners of the stock are no longer responsible for the Zakaat obligation since a diversion of obligation has been effected. After the admixture, the Zakaat obligation is transferred to the joint  inanimate stock. Truly, this reasoning is weird to say the least. SUBHAANALLAH!


Everyone knows that Zakaat is one of the Arkaan (Fundamentals) of Islam. The obligation of this Fardh injunction devolves on Muslims  — Muslim human beings, not on kuffaar, least of all on inanimate objects such as wheat and rice.  Mufti Taqi Saheb has cited the mas’alah of khultah (the admixture of two assets) which is a ruling of the Shaafi Math-hab as well as of some Jurists of the Maaliki and Hambali Math-habs. However, Mufti Saheb has omitted to mention that regardless of the incidence of admixture of rice and barley or the money of two human beings, Zakaat on the combined stock will be obligatory only if the human beings are free Muslims.

In view of the imperative condition of being a Muslim for the obligation of Zakaat, Zakaat will not be Waajib according to the Shaafi Math-hab on the joint stock owned by a Muslim and a kaafir. If the stock of a kaafir and the stock of a Muslim are combined, khultah has taken place. No one can deny this. Now if the obligation of Zakaat devolves on the joint inanimate rice and barley which were mixed or on any other combined stock, it would logically follow that Zakaat will have to be paid regardless of one partner being a Muslim and one a kaafir. Only the Muslim will pay Zakaat on his share of the mixture. The kaafir will not pay Zakaat on his share of the admixture regardless of the incidence of khultah.

If the joint stock was truly a separate entity or a juridical person in the western conception of the term, then Zakaat should have been obligatory on the stock by virtue of the principle of  khultah regardless of the faiths of the owners of the joint stock. Faith does not apply to the inanimate ‘juridical person’. It is therefore meaningless to portray  the joint stock as a juridical person and divert the obligation of Zakaat from the joint stock to only the Muslim.

This should make it abundantly clear that it is not the inanimate joint stock which is liable for Zakaat payment and obligation. The obligation is squarely the responsibility of the Muslim human being, not of the inanimate joint stock. Hence, Zakaat is not payable on such ‘joint-stock’ if both partners are kaafirs or if one partner is a Muslim and the other a kaafir. In this case, the ‘khultah’ has absolutely no effect. Only the Muslim will pay Zakaat on his share of the stock, and that too, if it amounts to nisaab or more.  The crucial determinant for the obligation of Zakaat is the nisaab  value owned by Muslim human beings. This is the unanimous verdict of all the Fuqahaa of Islaam. The difference is only in the manner in which the nisaab is attained. While the Shaafi Fuqahaa accept the validity of a  nisaab  achieved by admixture of assets (khultah), the Hanafi Fuqahaa reject this principle.


To gain a better understanding, it is necessary to explain what exactly is the meaning of Khulta tush Shuyoo’. Khultah simply means an admixture of different substances or things. An admixture of heterogeneous things produces a homologeous whole, for example, different metals mixed after melting produce one whole alloy.

Shuyoo’ means permeation or spreading throughout in every particle of the whole combination of things. In the context of Zakaat, Khulta tush Shuyoo’ means the amalgamation of assets belonging to more than one person, whether two or a  hundred, etc. For the obligation of Zakaat, a minimum amount termed the Nisaab is necessary. If a person is the owner of the nisaab value, he has to pay Zakaat. If a man owns several Zakaat-taxable assets, each being less than nisaab, the variety of assets will be figuritively amalgamated to see if they collectively amount to nisaab.  Thus, a man’s little cash, little stock-in-trade and a little silver he owns will all be added up and Zakaat will be paid on the combined value of his stock if it amounts to nisaab or more.

When the little assets of a variety of kinds, each less than the  nisaab, belonging to a single person have a combined value of Nisaab, then Zakaat becomes Waajib on him. Since the owner of the variety of little assets of different kinds’ is one person, the khultah (amalgamation) of values suffices for the production of the nisaab. On the other hand, according to the Shaafi Mathhab, if a physical khultah  (amalgamation) of assets belonged to several Muslim  persons has transpired, then this physical whole will be treated as a homologeous whole of one person only for the purpose of assessing Zakaat, not for any other purpose whatsoever. Confirming this, Imaam Nawawi (rahmatullah alayh) says in Raudhatut Taalibeen, Volume 2, page 170:

“Thus, the maal (stock/assets) of two or more persons will be regarded as the maal of one person. Then Zakaat will become obligatory.”

For the purpose of levying Zakaat only, and for no other purpose whatsoever, the Shaafi Math-hab rules that the amalgamated stock be treated as a homologeous whole for the production of  nisaab. There is nothing more to this amalgamation. For the obligation of Zakaat in this case, a juridical man is not necessary nor does amalgamation of assets give rise to a juridical person. Only the nisaab value is required. And, this requirement is acquired by treating the combined assets as a whole. If the amount of the amalgamated stock is less than  nisaab, the khultah has no effect whatsoever even in the extremely limited scope the Shaafi Math-hab allows it to operate, namely, only for assessing Zakaat.

The following example in Raudhatut Taalibeen also confirms that the obligation of Zakaat is the liability and responsibility of the two human Muslim partners of the amalgamated stock. It is NOT the obligation of the inanimate ‘joint stock’ as has been averred by Hadhrat Mufti Saheb.

“…like two men who amalgamate forty (goats) with forty (goats). One goat is Waajib on both of  them.” (Volume 2, page 170)

The ruling is clear — Zakaat is Waajib on both human beings  whose stock has been amalgamated. Zakaat is not Waajib on the inanimate amalgamated stock. It is simple to understand that just as Zakaat is Waajib on one owner when his Zakaat-stock is equal to nisaab   or more, so too in exactly the same way is Zakaat compulsory on two owners according to the Shaafi Math-hab when their combined stock equals nisaab or more. There is no intermediary of a ‘juridical person’ here, nor is there a need for such a fictitious person. The Western kuffaar had a specific need for inventing the paper man they term ‘juridical person’. We have no need for such a fiction. Islam has ample systems, devices and apparatus for all exigencies and times.

While the condition for the obligation of Zakaat is related to wealth, the obligation of discharge or payment of Zakaat is the liability of the Muslim human being, not of the inanimate stock. Khultatush Shuyu’ or amalgamation produced by permeation or diffusion of the stocks of more than one person results in a homologeous whole akin to the homologeous whole of one owner. This factor has been taken by the Shawaafe fuqaha to hold the two or more owners of the amalgamated stock responsible for Zakaat payment. There is nothing further to read in this principle. It presents no substantiation for the western concept of juridical person. 

Khultah itself cannot assume any liability. The liability of Zakaat remains the responsibility of the Muslim owners. Imaam Nawawi states in his Raudhatut Taalibeen, page 171, Vol.2: Page 26:

“(Among the conditions) is that both  the (human) amalgamators should be of those on whom Zakaat is Waajib. Therefore, if one of the two (owners of the amalgamated stock) is a zimmi (non-Muslim citizen of a Muslim state) or a Mukaatab (a category  of slaves), then khultah will have no consequence. If the share (of the amalgamated stock) of the  free Muslim is nisaab, he (the Muslim) will pay Zakaat on it, the Zakaat of one person (the Muslim owner). If not (i.e. if his share is less than nisaab), there is nothing (of Zakaat) on him.”

This ruling clearly negates the suggestion that the amalgamated stock has become a juridical person who has liability and who has become liable for Zakaat. Zakaat remains the obligation of only the Muslim person. It is never diverted from the Muslim owner to anyone or anything else.

There are also other examples in the Shaafi books of Fiqh to negate the claim that amalgamated stock called ‘joint stock’ is a juridical person having rights and obligations like insaan (a human being).


Regarding the insolvent estate of a deceased, Hadhrat Mufti Taqi Saheb says:

“According to the jurists, this property is neither owned by the deceased, because he is no more alive, nor is it owned by his heirs, for the debts on the deceased have a preferential right over the property as compared to the rights of  the heirs. It is not even owned by the creditors, because the settlement has not yet taken place. Being property of nobody, it has its own existence and it  can be termed a legal entity.”

The aforementioned averments are not entirely correct. The following claims are incorrect:

⚫ The property of the deceased is the ‘property of nobody’.
⚫ The property of the deceased, according to the Jurists, is neither owned by the deceased nor the heirs.

Hadhrat Mufti Taqi Saheb arbitrarily without Fiqhi or Shar’i basis makes the following erroneous conclusion:

“Being property of nobody, it has its own existence and it can be termed a legal entity. The heirs of the deceased or his nominated executor will look after the property as managers, but they are not the owners.”

The only statement which is correct here is that “his nominated executor will look after the property as manager.” The heirs of the deceased while they too can look after the affairs of the estate, are not in the same capacity as the executor.

Regarding the ownership of the deceased’s estate, there are two views propounded by the Fuqaha. None of these corroborate the claim that ‘nobody is the owner of the deceased’s insolvent estate’.

The one view is that the estate of a person after his death and prior to division legally remains the property of the deceased. This view is stated as follows in Al-Mabsoot of Sarakhsi, page 111, Vol.28:

“The estate after death, prior to division, remains in the ‘hukm’ of the property of the murith (the deceased from whom the heirs inherit).”

Recording the same view, Hidaayah states in Vol.2, page 638:                      

“The ownership (of the deceased) remains after death in view of the need…….”

The other view is that the ownership of the heirs is established and confirmed simultaneously with the death of the murith. Hidaayah states:

“The right of the heirs is confirmed in the assets of the  murith from the inception of the (deceased’s) illness (maradhul maut), hence he (the deceased is estopped from acting in two thirds (of his estate)…” (Vol.2 page 639)

On page 639, Vol.2 of Hidaayah also states: 

“The reality of ownership of the heir is confirmed at the time of death while before death only the right (of the heir) is confirmed.”

According to the Fuqaha these are then the two views, namely, (1) The ownership of the deceased remains after his death and continues until division has taken place.
(2) Ownership is confirmed at the time of death.

The Fuqaha do not propound the view that nobody is the owner of the deceased’s estate. Regardless of the liabilities exceeding the assets, ownership passes to the heirs since their right of ownership is established during the maradhul maut (the last sickness) of the murith. Thus, at the time of his death it is not a question of their right or claim being established and confirmed. This right came into existence during the last illness of the deceased. On his death, they automatically become the owners of the estate.

This is not the same for the creditors. Their claim over the assets of the deceased existed  from the very time he had incurred the debt. Their claim and right remain even after his death because Islam does not recognize the concepts of limited liability and automatic absolution of debt.

On the death of the murith, the heirs become the owners automatically. Hence, if the heirs distributed the assets without paying the creditors of the deceased, the distribution will be valid, not baatil. The creditors will nevertheless have the right of pursuing them to demand their rights which the heirs had usurped. Assuming that after the distribution of the assets to the heirs, the creditors waive their claim, the distribution remains valid because they had distributed what was in their ownership.

The heirs need not procrastinate the division of the estate. It is quite possible that considerable time will lapse before the rights of the various creditors are proven. It is also possible that some creditors may be absent. It is also possible that at the time of the death of the murith the financial state of the estate is not known. The debts may surface  later. Some creditors may not even be aware of the death of their debtor. In view of these possibilities, the heirs will proceed with the division of the estate and take possession of their respective shares of  the assets. Later when the rights and claims of the creditors are proven, the heirs will have to pay, not because the assets were in the ownership of the creditors, but on account of their rightful claims.

If it should be assumed that indeed nobody is the owner of the insolvent estate of the deceased, then too there is no compelling reason to create a ‘juridical phantom’ to assume ‘ownership’. The division and the fulfillment of rights can proceed without ownership having passed to anyone. In this case it will be said that ownership passes to the heirs and creditors after division,  and for the presentation of a rationale, it will be said that the need occasions the view of ownership remaining with the deceased until division takes place. This is in fact the view stated in Al-Mabsoot.

If anyone is surprised at the claim of a dead person being an owner, then we must say that the surprise should be greater for the silly concept of a piece of paper or an abstract idea being an owner such as the fictitious creature of the western kuffaar, namely, the ‘juridical person’. At least the deceased at one stage in the very recent past was a true owner. He was an honourable  insaan who is Ashraful Makhlooqaat (Allah’s noblest creation). Thus, the surprise will be totally misdirected and baseless.

There is therefore, absolutely no basis for presenting the insolvent estate of the deceased as grounds for claiming validity for the concept of juridical person with its un-Islamic consequence of absolution of debt or denial of the rights of the creditors.


With regard to the insolvent estate of the deceased, Hadhrat Mufti Saheb states:

“…..the liability of this juridical person (the estate of the deceased) is certainly limited to its existing assets. If the assets do not suffice to settle all the debts, there is no remedy left with its creditors to sue anybody, including the heirs of the deceased, for the rest of their claims.”  

The ability of the creditors to claim is restricted to the material assets of the deceased. It is palpably erroneous to claim that there is no remedy left for the creditors. Yes, in terms of kuffaar laws, there is no remedy. But according to the Shariah, the claims of the creditors are not eliminated on account of the insolvency of the estate. The claims remain here and will remain in Qiyaamah. 

The heirs cannot be pursued because they are not indebted to the creditors of the deceased. It is not that they are absolved of the debt in terms of some limited liability concept of the Shariah. In relation to the creditors of the deceased, the heirs are outsiders just as non-heirs are. The introduction of the limited liability claim here is thus superfluous and baseless.

Perhaps Hadhrat Mufti Saheb had not reflected deeply regarding the consequences of absolution of debt and limited liability stemming from the western juridical person concept. If this  concept is accepted, the implication is that the creditors will have no claim over their debtors in Qiyaamah. This is truly a dangerous theory because the Nusoos are categoric and emphatic in declaring that the creditors will be able to claim their huqooq in Qiyaamah and receive payment there. In fact, even the Shaheed (Martyr) will be held liable for debt notwithstanding the obtainal of forgiveness for all his sins. We are certain that Hadhrat Mufti Saheb will at this juncture appreciate the  danger of the concept of limited liability.

To cancel clear and categoric Nusoos simply to find validity and acceptability for the western juridical person and its effect of limited liability is indeed fraught with grave perils among which is the rejection or abrogation of clear and Saheeh Ahaadith on the basis of extremely flimsy ta’weel (interpretation).

Hadhrat Mufti Taqi Saheb avers:

“If a juridical person can be treated a natural person in its rights and obligations, then every person is liable only to the limit of the assets he owns……”  

There is a contradiction here. If every person is liable to the limit of the assets he owns, then it conflicts with the limited liability concept Mufti Saheb propounds because in terms of this principle every person (shareholder) is absolved of the debt incurred in the name of the juridical person. Only the assets of the company can be claimed by the creditors, not the assets the shareholders own in their own names.

Perhaps Mufti Saheb has phrased it wrongly. In view of the principle of limited liability he advocates, he refers to the assets or amount of capital which the shareholder has invested in the company. While he will lose these assets, his other assets unrelated to the company will remain unaffected and he will be absolved of the debt.

How will Mufti Taqi Saheb reconcile this automatic absolution of debt acquired from kuffaar law with the many Ahadith which clearly negate absolution and on the contrary confirm the claim and right of the creditor to continue into the Aakhirah?

Hadhrat Mufti Taqi Saheb further propounding the limited liability principle states:

“…and in case he dies insolvent, no other person can bear the burden of his remaining liabilities, however closely related to him he may be. On this analogy the limited liability of a joint stock company may be justified.”  

This analogy is fallacious. The  venerable Mufti Saheb has simply stated what is so obvious. Relationship and family ties do not produce liability. The one who has liabilities is responsible for discharge of his obligations. As mentioned earlier, the heirs are not liable for the debts of the deceased for the simple reason that the debts are not their liability. The question of limited liability and absolution of debt is thus not directed to them. There is therefore no analogy whatsoever on which to base the limited liability principle of the kuffaar.


Hadhrat Mufti Taqi Saheb presenting another example to substantiate limited liability, states:        

“Here I would like to cite another example with advan  tage, which is the closest example to the limited liability of a joint stock company. ……The slaves of those days were of two kinds………There was another kind of slaves who were allowed by their masters to trade. A slave of this kind was called abd-e-ma’thoon. The initial capital for the purpose of trade was given to such a slave by his master, but he was free to enter into all commercial transactions. The capital invested by him totally belongs to his master. The income would also vest in him, and whatever the slave earned would go to the master as his exclusive property. If in the course of trade, the slave incurred debts, the same would be set off by the cash and stock present in the hands of the slave. But if the amount of such cash and stock would not be sufficient to set off all the debts, the creditor had a right to sell the slave and settle their claims out of his price. However, if their claims would not be satisfied even after selling        the slave, and the slave would die in that state of indebtedness, the creditors could not approach his master for the rest of their claims. Here the master was actually the owner of the whole business, the slave being merely an intermediary tool to carry out the business transactions. The slave  owned nothing from the business. Still, the liability of the master was limited to the capital he had invested including the value of the slave.”  

In this example, there is no substantiation for either the juridical person or for the principle of limited liability   in the meaning of the concept of the capitalist economists. Sight should not be lost from the fact that Hadhrat Mufti Taqi Saheb has presented the principle of limited liability with its consequence of automatic absolution of debt as the logical effect of the acceptance of the juridical person. Without the existence of a ‘juridical person’ there is no basis for the principle of ‘limited liability’. In fact, the creature known as ‘juridical person’ was spawned specifically for the principle of limited liability. 

But, in the example of Al-Abd-ul Ma’thoon (the slave who is permitted by his master to trade), the question of juridical person does not feature. The slave is not a juridical person. His master is not a juridical person. In this example are only real human beings.

With regard to limited liability, it does not apply at all to the actual trader, namely, the Abd-e-Ma’thoon. The actual trader, dealer, transactor and contractor is the Abd-e-Ma’thoon, not the master. Hence, Abd-e-Ma’thoon is not absolved automatically of the debts he has incurred. He has to pay the debt he has incurred even if it takes him a lifetime. If at the end of his lifetime, the debt is not paid, the right of the creditors will extend into Qiyaamah where they will have the right to pursue him and demand payment.

If the Abd-e-Ma’thoon is unable to pay his debts, whatever wealth and stock he has in his possession will be possessed by the creditors. After this, if the debts are not fully discharged, the creditors have two options:

(1) To compel him to work and pay his debts.
(2) To sell him and take the proceeds of the sale as payment on his debt account.

If after selling him, the debts are not fully paid, the creditors can still pursue him after he has been emancipated. The better option, ofcourse, is to induce him to work and pay. He is not absolved of the debt. Limited liability does not apply to the slave, the slave, who is the actual trader and transactor.

The master is responsible for only the amount which he had initially invested and the price of the slave. But this is not due to any limited liability principle as advocated by Western theory. This ruling of the Shariah is based on another principle, namely, the principle of Taukeel (the Shariah’s system of Agency) is the principle which governs the relationship, rights and obligations of the parties to a transaction. The liability and obligation of payment devolve on the actual transactor/ contractor who had incurred the debt. In relation to the creditor/seller, the obligation of payment is not the responsibility of the Muakkil (the Principal) who had appointed the Wakeel (Agent). The Shariah states this principle as follows:

“He (the Wakeel) is the transactor (or contractor), hence, the huqooq (the obligations) relate to him.” (Hidaayah, page 505, Vol.2)

“Verily, the huqooq (rights and obligations) of a transaction relate to the Aaqid (the transactor).” (Hidaayah, page 163, Vol.2)

“The huqooq (rights and obligations) of every transaction  the Wakeel relates to himself, e.g. selling, leasing, relate to the Wakeel not with the Muakkil (Principal)………The Wakeel is the actual transactor (Aaqid)  in reality……Since he is the actual transactor the huqooq of the transaction apply to him.”               (Hidaayah, page 163, Vol.2)

“If the Muakkil (Principal) demands payment from the buyer (to whom the Agent sold the item), he (the buyer) has the right to deny payment because in regard to the transaction (aqd) and the rights of the aqd, he (the Muakkil) is a stranger in view of the fact that the huqooq relate to the aaqid (the transactor) (Hidaayah, Vol.2)

This makes it abundantly clear that in terms of the Shariah, the creditors can demand payment from only the Aaqid (the one who incurred the debt). In this case it is the Abd-e-Ma’thoon (the slave whom the master permitted to trade). Furthermore, while the creditors cannot demand payment of the debts from the owner of the Abd-e-Ma’thoon, the latter is not protected by any limited liability principle which absolves him from the debts. He has to pay with whatever stock and cash he has on hand. Then he has to work and pay the balance of the debts. In fact, if the creditors decide, they can sell him and divert the proceeds to wards payment of his debt. Should the master emancipate the slave, he (the slave) will be pursued by the creditors for any outstanding debt and he will be compelled to pay. And, if he dies insolvent, the claims of the creditors will apprehend him in the Divine Court in Qiyaamah.

This should be sufficient to convince any impartial student of the Deen that the principle of limited liability does not pertain at all to the Abde-Ma’thoon. In so far as the master is concerned, limited liability applies in its literal meaning, not in the technical meaning of the kuffaar concept which gives rise to absolution of debt and to the fictitious person.

The master’s liability is limited to the initial stock and the price of the Abd-e-Ma’thoon because he (the master) undertook liability to this extent. In other words, the master was the Kafeel (guarantor) of this amount. Thus, on the basis of the Shar’i principle of Wikaalat, the creditors have the right to demand full payment (not limited payment) from the  Abd-e-Ma’thoon, and not from the master who happens to be the Muakkil. And, in terms of the principle of Kafaalah (Suretyship), the creditors can demand from the master the amount which he had undertaken to pay.

This then is the explanation for the limited liability of the master. The limited liability in this case is not the product of the concept of a juridical person, for there is no such fictitious person involved in the contract between the Abd-e-Ma’thoon and the creditors nor in relation to the master who is the Muakkil.

The principle of Taukeel (Agency) is not confined to the specific example of the Abd-e-Ma’thoon.  The same principle governs a  Shirkat (Partnership) enterprise as well. In partnership businesses such as Shirkat-e-Anaan and Shirkat-e-Wujooh, the creditors can demand payment and pursue only the actual partner who had transacted and had incurred the debt. In these types of Shirkat  ventures, each partner is the  Wakeel of the other partner, not the Kafeel. Hence the huqooq of the aqd apply to only the transacting partner. Yes, the Wakeel can demand payment from his partner and pursue him until the end of his life and if necessary, into Qiyaamah.

According to Imaam Shaafi (rahmatullah alayh) the problem is more difficult for Hadhrat Mufti Taqi Saheb because the Shaafi Math-hab teaches that the huqooq relate to the Muakkil.

Explaining the rationale underlying the debt being solely the liability of the Abd-e-Ma’thoon, the Hanafi Fuqaha state:

“If they (the creditors) wish, they may pursue the Abd (Abd-e-Ma’thoon) for the entire debt because the factor (or reason) of the obligation (of the debt) emerges from him in reality, and that is  the transaction.”       (Badaaius Sanaai’, Vol.7, page 197)

The master cannot be compelled to settle the debts because he was not the transactor and he had declared the amount which he guarantees, hence the excess debt is not his liability. The Hanafi Fuqaha state in this regard:

“If after the Abd has been sold (by the creditors), there remains unsettled debt, this cannot be demanded from the master because there is no debt on him. The slave has to be pursued after his emancipation to settle the debt because the whole of the debt is his liability.” (Badaaius Sanaai’, page 197, Vol.7)

The aforegoing explanation  should be adequate to dismiss the claim of juridical person, limited liability and absolution of debt read into the relationship which the Abd-e-Ma’thoon and the master have with the creditors.


The Shariah has made ample provision to initiate large business ventures. The Islamic systems of Shirkat and Mudhaarabah are adequate. In a truly Islamic state  —  and there is none existing today  —  these sys tems could be introduced and made to function correctly without the need to encumber it with the baatil kuffaar concept of ‘juridical person’ which spawns the evil creatures of limited liability and automatic absolution of debt in stark conflict with the Ahadith of Rasulullah (sallallahu alayhi wasallam).

It must be understood that a transaction in trade is valid only if the parties involved in the deal are human beings. This vital condition for the validity of transactions and contracts, effectively refutes and knocks out the bottom from the kuffaar concept of ‘juridical person’ with its concomitant evil consequences. Just as a stone cannot be accepted as a god even if it is given legal acceptance by some religions and laws, so too, can a stone and a piece of paper not be accepted as a legal person with powers of transacting in the way a true insaan (human being) contracts.


After presenting his case for the acceptance and validity of the fictitious person termed ‘juridical person’, Hadhrat Mufi Taqi Saheb observes:

“But at the same time, it should be emphasised, that the concept of ‘limited liability’ should not be allowed to work for cheating people and escaping the natural liabilities consequent to a profitable trade.”  

This conclusion presupposes that ‘escaping the natural liabilities’ is acceptable if the trade is not profitable. But Islam does not accept this hypothesis. Whether trade is profitable or not, there is no escape from natural liabilities. It is wholly unjust and cruel to expect that Zaid has to pay the damages incurred by Bakr’s unprofitable trade. While kuffar law accommodates such injustice and escape of natural liabilities, Islam allows no scope for accepting such incongruities.

Hadhrat Mufti Saheb has presented purely his opinion unbacked by any Shar’i evidence. His entire case has been structured on the kuffaar concept of ‘juridical person’ for which there is absolutely not the slightest vestige of evidence and support in the Shariah. On the basis of an arbitrary assumption, further conclusions are made arbitrarily.

Everyone is aware that cheating, fraud and dishonesty are haraam. Therefore, it is superfluous for Hadhrat Mufti Saheb to raise  this moral precept in this discussion pertaining to the purely juridical domain. But in view of the grave danger which accompanies the kuffaar ‘juridical person’ concept, Hadhrat Mufti Saheb is constrained to introduce the moral dimension. Needless to say, there is widespread fraud being perpetrated under cover of the kuffaar concept of legal person with its concomitant limited liability principle. Fraud is perpetrated on a massive scale by both public and private companies. This is no secret. In all cases of such fraud which is cleverly concealed in cooked-up books, the creditors have to suffer while in most cases the shareholders and directors sit snug with huge sums of money  and ‘private’ assets siphoned off clandestinely and fraudulently from the assets of the so-called ‘juridical’ ghost.

On the contrary, Islamic concepts and principles do not allow debtors to escape their liabilities whether the trade is profitable or not. In terms of the Islamic concept, the liabilities will hang on the necks of the debtors even on the Day of Qiyaamah. This very concept of Payment in Qiyaamah knocks the bottom out from the argument of limited liability and absolution of debts presented by Hadhrat Mufti Saheb.

Hadhrat Mufti Saheb is too well aware of the massive scams and cheating, dishonesty and fraud which accompany the limited liability idea, hence he felt constrained to offer his advice. But the kufr law does recognize this danger, hence it has instituted measures to check the anticipated fraud which is just natural for people who have no fear of Allah Ta’ala and no proper concept of the Aakhirah. Inspite of severe penalties prescribed by kuffaar governments for mismanipulation of the poor ‘juridical’ phantom, fraudsters are not deterred. The scope of  subverting the ‘juridical’ fellow for dishonest personal gain is too wide.

Hadhrat Mufti Saheb suggests that the fraud could be blocked in the following manner:     

“So, the concept could be restricted to the public companies only who issue their shares to the general public and the number of whose shareholders is so large that each one of them cannot be held responsible for the day-to-day affairs of the business and for all its liabilities.”  

Again this suggestion presupposes that public companies by far and large are honest and do not perpetrate fraud, hence only such companies should be rewarded with the “benefit” of the ‘juridical’ man with ‘his’ limited liability attribute. That public companies  perpetrate scams and fraud on massive scales is not a secret to those who are abreast with developments in this sphere. They commit the worst acts of fraud. Thousands of small shareholders lose their life’s savings. Huge companies and conglomerates suddenly collapse. Both the shareholders (the general public) and creditors suffer.

Restricting the concept to public companies does not solve the problem of fraud and cheating. The bigger the company, the greater is the fraud and the more difficult to curtail and detect. They are too clever for the stupid trustees which a court appoints as inquirers into the rotten affairs of the collapsed company.

In the aforementioned conclusion made by Hadhrat Mufti Saheb,  the following two items have been propounded:

(1) In view of the large number of shareholders, each one of them cannot be held responsible for the day-to-day affairs of the business.

(2) In view of No.1, the shareholders cannot be held liable for the debts exceeding the assets.

In so far as averment No.1 is  concerned, the Shariah accepts this in even a small partnership of just two persons. The sleeping partner cannot be held responsible for the day-to-day affairs of the business because he simply is not active in the business and is not aware thereof. But averment No.2 is not a necessary corollary of No.1.  According to the Shariah, even the dormant partner (shareholder) is liable for the debts in proportion to his percentage shareholding.

However, the Shariah makes one concession. While not absolving the dormant partners of the liabilities of the business, the creditors cannot demand payment from them. The right of demanding is vested in the partners who had actually transacted and incurred the debts. The creditors can demand from the transactors, and the latter can demand from the dormant partners. This is the effect of the operation of only the principle of Wikaalat (Agency) in Shirkat (Partnership), not of Kafaalat (Suretyship).

In conflict with Shar’i principles, Hadhrat Mufti Saheb argues in favour of total absolution of debt, and for this serious issue he presents as daleel only the fact of the large number of shareholders. But the Shariah does not accept the number or large number of shareholders as a basis for absolution of debt and for escaping liabilities.

Commenting further on this issue, Hadhrat Mufti Saheb avers:

“As for the private companies or the partnerships, the concept of limited liability should not be applied to them, because practically each one of their shareholders and partners can easily acquire a knowledge of the day-to-day affairs of the business and should be held responsible for all its liabilities.”  

It is acceptable according to the Shariah that the large number of shareholders who have no active role in the affairs of the business be exonerated from the malpractices of the active culprits. But, the Shariah does not accept the hypothesis that they be absolved of the liabilities which their agents had incurred. If anyone claims the contrary, it devolves on him to produce Shar’i evidence, not opinion, regardless of how rational and acceptable such opinion may appear on the  basis of the economic principles propounded by western or any other kufr system of economics.

Pursuing his argument, Hadhrat Mufti Taqi Saheb states:

“As for the private companies or the partner ships, the concept of limited liability should not be applied to them, because, practically, each one of their shareholders and partners can easily acquire a knowledge of the day-to-day affairs of the business and should be held responsible for all its liabilities.”  

The concept of limited liability is a purely kuffaar concept  for which attempts are being made to make it acceptable to the Shariah. After accepting the validity of this concept, Hadhrat Mufti Saheb seeks to deny the full consequence of the ‘juridical person’. If the ‘juridical person’ concept which is alien to Islam, is accepted, then its effects should not be divorced from it. To apply the limited liability principle to only public companies and to debar private companies from its ‘benefit’ is in conflict with this concept for whose ‘Islamic’ validity much argument has been tendered, albeit fallacious.

Non-Muslims who had originated this concept apply it logically and uniformly to both public and private companies. To restrict it to only public companies is unintelligent and illogic after the validity of the ‘juridical man’ has been accepted. This type of incongruity and conflict develops when Muslims endeavour to give Shar’i legality and status to the ideas of the kuffaar. The concept in the western capitalist system is original, uniform and workable since it conforms to their  nafsaani behests. But when it is introduced into Islam, it is artificial, incongruous and unworkable because it has to be subjected to a process of abridgement since even in the opinion of the votaries of this concept, it is fraught with perils. But then the abridgement results in a hybrid concept unacceptable to both the Shariah and the capitalist system.

Hadhrat Mufti Saheb’s averment that the ‘benefit’ of limited liability should be denied to private companies and partnerships, pre-supposes that all or most small companies or their shareholders and partners are crooks and frauds while all or most of the directors and shareholders of large public companies are honest gentlemen. The reality is the opposite. Whatever the reality may be, the suggestion ventured by Mufti Saheb is illogic and untenable. He has no valid basis, neither logical nor Shar’i, for his suggestion.

The arbitrary implication that the partners/shareholders of small partnership businesses are dishonest and frauds is lamentable to say the least. Furthermore, such an arbitrary opinion unbacked by evidence cannot be presented as a basis for the illogic proposition of differentiating between public and private companies.

The claim that ‘each one of the shareholders and partners ’ of small private companies and partnerships ‘can easily acquire a knowledge of the day-to-day affairs of the business’ cannot be a valid basis for creating a difference in the obligations of partners in a small partnership and a big or public partnership/company. Besides personal opinion, there is no basis for this, neither in the Shariah nor in the western capitalist system.

The determinant in the duty of fulfilling obligations is the haqq (right) of others. In this case the  huqooq (rights) of the creditors are at stake. Denial of the rights of the creditors on the flimsy pretext of ignorance of the day-to-day affairs of the business is untenable, unacceptable and palpably unjust as well as in conflict with Islam’s declared principle of Payment in even the Aakhirah. 

The directors of big companies and the active partners of small or private partnerships can easily pull wool over the eyes of the shareholders. It is only when the bubble bursts or is about to burst will the dormant partners realize the truth. In fact, the Shar’i rationale for the need to validate partnership enterprises is that while some people have money, they are ignorant of the ways of utilizing the money constructively to generate profit. On the otherhand, some people lacking money do have the expertise of using the capital to generate profit. But Islam does not validate absolution of debt and shirking of obligations on the basis of such ignorance of the capitalists who advance the initial capital.

The clever one, if he is dishonest, has the ability to conceal the real state of affairs of the business whether the enterprise is a public or a private one — a business with innumerable shareholders or a small business with just two partners. Honesty and dishonesty  are not the attributes of quantity. It does not  follow that a large company with numerous shareholders will operate honestly, hence it should be privileged with ‘limited liability’ while small partnerships are run by dishonest partners hence they should be deprived of this privilege. This proposition is unreasonable.

It is illogic and unintelligent to penalise a partnership if it is small or private, and to award it if it is large or public Just as partners of small partnerships cannot be exonerated from their liabilities, so too may the partners of large partnerships or companies not be let off the hook. They enjoyed the profits of the business, so they are Islamically, legally and morally obligated to share the burden of the liabilities proportionately.

The criterion of honesty is not the largeness or the smallness of the partnership/company nor the numerical factor of its partners or shareholders. Neither does Islam accept this criterion nor does western or capitalist economics accept it. The argument of Hadhrat Mufti Saheb and the consequences ensuing in its wake thus have no validity. 

Hadhrat Mufti Saheb worked himself into a tight corner in the endeavour to produce a hybrid concept of ‘limited liability’ which does not satisfy either the Shariah or western economics, Hadhrat Mufti Saheb thus states:

“There may be an exception for the sleeping partners or the shareholders of a private company who do not take part in the business practically and their liability may be limited as per   agreement between the partners. If the sleeping partners have a limited liability under this agreement, it means, in terms of Islamic jurisprudence, that they have not allowed the working partners to incur debts exceeding the value of the assets of the business. In this case, if the debts of the business increase from the specified limit, it will be the sole responsibility of the working partners who have exceeded the limit.”  

Hadhrat Mufti Saheb has again lapsed into a self-contradiction in the idea of ‘limited liability’ which he has posited. In this averment, Hadhrat Mufti Saheb has implied an analogy for securing the exoneration from liability of the sleeping partners of a small partnership or private company. The analogical argument implied is as follows:

? The numerous shareholders of a public company are sleeping partners.

? The sleeping partners in the public company are and should be exonerated from liability exceeding the assets of the company (which in reality are the assets of the shareholders).

? The determinant for this exoneration is dormancy (or being a sleeping partner).

Now it is seen that this same factor of dormancy exists in the sleeping partners of a small partnership or private company. Thus, the logical consequence of exoneration from full liability should be extended to the sleeping partners of a small partnership or a private company as well.

So far the logic appears to be sound, i.e. if the determinant in the abovementioned syllogism is accepted as valid in the Shariah. In fact, it is not valid, but we have assumed its validity for a moment in order to bring to the fore the incongruency of the whole argument.

In his averment, while Hadhrat Mufti Saheb exonerates the sleeping partners from full liability, whether such partners hap pen to be the partners/shareholders of a small business enterprise or of a big public company, he distinguishes between the active partners (who may be the directors) of a public company and the active partners of a small partnership or the active shareholders (who may be the directors) of a private company. In relation to the private company, Hadhrat Mufti Saheb states explicitly  that the debts will be the “sole  responsibility of the working partners who have exceeded the limit”. But the venerable Mufti  Saheb does not pass this same  fatwa for the working partners/ shareholders of public companies.

In so far as the working partners or shareholders of a public company are concerned, Hadhrat Mufti Saheb applies the western concept of the ‘juridical person’ fully thereby exonerating the working partners from their debts. But in relation to the private company, Hadhrat Mufti Saheb formulates an entirely new principle which conflicts with the ‘juridical person’ he is at pains to  validate and offer Shar’i legality. And, this new and arbitrary principle is that the same exoneration is not applicable o the active partners of a small partnership or private company. 

There is no justification to apply the concept of ‘juridical person’ partially to a private company when the natural, logical and legal (legal in kufr law) consequence of the application of this concept is identical for even a private company. The concept does not provide for differentiation between a public and a private company. The shareholders of both are legally allowed to escape their liabilities. But Hadhrat Mufti Saheb selectively applies the western concept of absolution of debt, described deceptively as ‘limited liability’. But, for this selection there is no basis in either the Shariah or in the western system of economics. In fact, rationally the selective process adopted by Hadhrat Mufti Saheb is seriously flawed with the defect of incongruity. This is indeed not surprising. When an attempt is made to create a fusion of Haqq and Baatil, the logical consequence is incongruity which the Shariah rejects.

With regard to the agreement between the sleeping and active partners of a small partnership which Hadhrat Mufti Saheb equates with a private company, the attempt has been made to show that the Shariah accepts the concept of limited liability. Let it be clearly understood that wherever in the Shariah the idea of ‘limited liability’ appears, it is not the capitalist concept of absolution from debt. It never means that the debt is automatically wiped out with the creditors having no relief and no further claim of demanding their rights. It simply means that a specific partner or partners is/are fully responsible for the debts to the creditors while the others are in turn liable to the active transactors for their share of the liabilities. It does not mean that the creditor’s claim lapses or falls away as the kuffaar limited liability concept propounds.

The ‘limited liability’ of a partner or partners in an Islamic partnership (Shirkat) business is not the same as the ‘limited liability’ concomitant to the western concept of the ‘juridical person’. In fact the term ‘limited liability’ is foreign to Islamic jurisprudence. In the Islamic sense it means the full liability  for which the partner had assumed responsibility. Prior to the commencement of the business the partner stipulated with his active partner that he (the active partner) should not incur debts in excess of x amount, and if he does, he is responsible. Thus, when the active partner incurred debts in excess to the x amount, he himself is liable since the excess is not the debt of the sleeping partner. The Shariah clearly stipulates that in a partnership, each partner while being the Wakeel (agent) of the other partner is not his Kafeel (guarantor). The creditors can demand from only the one who had contracted and transacted with them, not from the other partner whether he happens to be dormant or active.

However, the one partner can demand payment from the other partner since he had acted in the capacity of his agent. But he cannot demand from his principal (his partner whose agent he is) more than the amount which was stipulated and agreed on. Thus, it is not the western concept of ‘limited liability’ which operates here. It is full liability for the amount agreed on.

If the principal sends his agent to buy one loaf of bread, but he goes and buys two loaves, he cannot claim payment for two loaves. The principal will pay for only one loaf. It  will be baseless to argue that he pays for only one loaf by virtue of some ‘limited liability’ concept. It is simply the principle of  Wikaalat (Agency) which operates here.

In the argument presented by Hadhrat Mufti Saheb the terms partners and shareholders are used. He uses the term ‘shareholders’ for the investors in a public company while the word ‘partners’ is used for the investors in a private company. This implies that Hadhrat Mufti Saheb differentiates between a public and a private company. It was necessary  for Hadhrat Mufti Saheb to imagine a differentiation. This differentiation is the effect of the partial acceptance of the consequence of the ‘juridical person’ concept. Hadhrat Mufti Saheb applies it fully to the public company so that the ‘shareholders’ may derive the full benefit of absolution of debt which ‘limited liability’ means. On the other hand, Hadhrat Mufti Saheb strips the ‘juridical man’ of this power of absolving debt in relation to the ‘shareholders’ or partners of a private company. Yet there is no difference whatsoever in the partnership concept as it relates to a public company or to a private company, neither according to the western concept nor according to the Shariah.

The verdicts of both the Shariah and western kufr law are uniform. The same rules apply to the shareholders (partners) of public and  private companies. Although the effects of the two systems are opposites, they nevertheless are uniform. The ‘juridical man’ concept of the kuffaar absolves the shareholders of their liabilities whether they happen to be shareholders in a public or private company. The Shariah on the contrary, holds all shareholders responsible for their liabilities — full liability  —  whether they are shareholders of a public or private company.

However, Hadhrat Mufti Saheb has landed himself in the unenviable situation of having to borrow from both systems to produce a  new concept which is unacceptable to both the Shariah and to the western economic system.

In the new concept which stems from Hadhrat Mufti Saheb’s arguments, the limited liability principle of the ‘juridical person’ applies fully as envisaged by its formulators to the public companies while it does not or should not apply to private companies or the partnerships. Thus Hadhrat Mufti Saheb states:

“As for the private companies or the partnerships, the concept of limited liability should not be applied to them…..”


Another aspect apart from the limited liability discussion, is the ambiguous manner in which Hadhrat Mufti Saheb uses the terms private companies and partnerships. Does Hadhrat Mufti Saheb differentiate between private company and partnership  (Shirkat)? Are the shareholders of a public company partners in an Islamic Shirkat enterprise? Or is a public company some other type of a venture? Does Mufti Saheb use the words shareholders and partners synonymously in relation to a private company? Is a private company the same as an Islamic  Shirkat enterprise? Islam has clear concepts on these issues. Perhaps Hadhrat Mufti Saheb has different concepts formulated by blending the two diametric opposite systems. If so, we would like to say that any such fusion produces greater confusion which cannot be substantiated with Shar’i evidence.

In concluding his discussion, Hadhrat Mufti Saheb makes the following sweeping statement:   

“The upshot of the foregoing discussion is that the concept of limited liability can be justified, from the Shari’ah viewpoint, in the public joint-stock companies and those corporate bodies only who issue their shares to the general public.”

This sweeping statement is indeed the product of an arbitrary opinion. Neither is there justification for its application to the public companies nor to corporate bodies. To say that the Shariah permits this concept for  ‘only’ the public companies is absolutely baatil in the Shariah. It being baseless in terms of the western ‘juridical person’ concept is glaring. Hadhrat Mufti Saheb has not produced a single valid argument based on the Shar’i principles of Qiyaas to substantiate his claim for the validity of the ‘juridical’ mirage.

In conclusion, we can safely claim that this concept of the western kuffaar is a conspicuous example of chicanery and legal deception in the wake of which ensues massive fraud and denial of fulfilment of the huqooq of the creditors.

And, Allah knows best.

BY: Mujlisul Ulama of South Africa P.O. Box 3393
Port Elizabeth 6056
Rep. of South Africa


In the authentic Ahaadith of  Rasulullah (sallallahu alayhi wasallam) it is clearly stated that unpaid debt will be compensated with the Fardh Salaat and other virtuous deeds of the debtor. 

A’mal-e-Saalihah will be the currency in the Aakhirah with which the debtor will be compelled to pay his debts.  In a Hadith, narrated to us by Hadhrat Muhammad Masihullah (rahmatullah alayh), it is said that for every farthing (less than one cent) of unpaid debt, 700 Maqbool (accepted) Salaat of the debtor will be given in payment to the creditor.

However if the debtor was honest and made his best effort to pay, but before settling his debt, Maut claimed him, then Allah Ta’ala, out of His boundless Rahmat will “pay” the debt on behalf of the honest debtor. From this it is clear that there is no automatic absolution of debt which is the effect of the kuffaar concept of limited liability.

Absolution of debt is obtained in this world either by payment or by the creditor absolving the debtor. And, in the Aakhirah, absolution will be obtained by either paying with the currency of the Aakhirah or by Allah Ta’ala “paying” on behalf of the honest debtors. There is no other way. 


“Hadhrat Anas (radhiyallahu) narrates that Rasulullah (sallallahu alayhi wasallam) said:  ‘He who recites Qulhuwallaahu Ahad (i.e. Surah Ikhlaas) 200 times every day, fifty years of sins will be wiped off from him, except the DEBT on him.” (Al-Jaamius Sagheer) 


Rasulullah (sallallahu alayhi wasallam) said: “Verily, you have  been created for the Aakhirah.”

We have been sent into this world for a short time to gain spiritual elevation and perfection  to the best of our ability. We have not been sent to cultivate material perfection at the expense of sacrificing or harming our  Aakhirah. In every sphere of our life, the dimension of the Aakhirah has to compulsorily feature. No aspect of the Muslim’s life   should be conducted in isolation of the Aakhirah. Even the economic system which we adopt should necessarily be impregnated with the influences and values of the Aakhirah. 

It is a grievous error which Muslims in these day commit when they give the Aakhirah a back seat and make endeavours to bend and subject the Shariah to alien cultures and systems. One such destructive system is the capitalist economic system. Attempts are being made in different quarters to make the Shariah compliant to this kuffaar system by resorting to far-fetched and incongruous interpretation. Totally untenable and invalid analogies are presented in the attempt to accord Shar’i acceptability to alien concepts which Islam repels. One such concept is the utterly fallacious idea of the fictitious ‘juridical person’ with its baatil effects of ‘limited liability’ and automatic absolution of debt. But absolution of debt is in fact the denial of the huqooq (the rights) of the creditors. This concept is in diametric conflict with the abundant Nusoos — explicit Ahadith — of Rasulullah (sallallahu alayhi wasallam) which state with great clarity and emphasis that even the Shaheed  (Martyr) will not be absolved of his debt. Payment will be demanded in the Aakhirah. There is nothing allegorical or metaphorical about these Nusoos

In view of the clarity of the Nusoos and the position of the Shariah, viz., its juridical verdicts, the attempt to eke out Shar’i basis for the kuffaar concept is indeed most surprising. We can only attribute this attempt to an attitude of liberalism which is acquired when free association takes place between Ulama and Muslim capitalists who are ignorant of the Shariah; who have adopted western ways; whose trade and commerce are entirely capitalistic orientated, and whose life-styles are is at variance with the Sunnah.

The importance of discharging  huqooq, especially debt, cannot be overemphasised in view of the abundance of Ahadith which speak with great clarity on the issue of paying debt. The fact that the demand for payment by creditors is held valid in the Aakhirah by the Shariah, should be more than ample evidence for a Muslim that there is absolutely no scope in the Shariah for automatic absolution of debt which according to the capitalist economic system is the imperative effect of the limited liability principle which in turn has been spawned by the fictitious man dubbed ‘the juridical person’.

If the process of Qiyaas  (Analogical Deduction) culminates in a conclusion which militates against the Nusoos of the Shariah, then such qiyaas will be set aside as baseless regardless of any rational or logical basis it may have. Our criterion is the Ahkaam (Laws) of the Shariah and their underlying Nusoos. Anything in conflict should necessarily be struck down. The limited liability idea besides being in diametric contradiction with the Ahaadith of Rasulullah (sallallahu alayhi wasallam), does not conform to even the Shar’i procedure of Qiyaas. There is absolutely no primary premiss (Maqees alayh)  for gaining a Shar’i hukm of validity and permissibility for this alien concept.

An attempt was made, albeit abortive, to show that certain Shar’i masaail (laws) conform to the limited liability idea. However, we claim with great emphasis that there is not even a superficial basis for this concept in the examples presented as Shar’i grounds for the un-Islamic concept. 

In response to a Sahaabi who asked about forgiveness for the sins of a Shaheed (Martyr), Rasulullah (sallallahu alayhi wasallam) said: “Yes, (i.e. His sins are forgiven) if you are firm, sincere and facing (the enemy in the battlefield) not turning your back (in flight), except debt. Verily, Jibraeel said this to me!!   (Tirmizi)

‘Islamic Banks’ – Banks of Riba

By Mujlisul Ulama

IMAAM GHAZAALI (rahmatullah alayh) depicting the villainy of the money-traders (money changers, money lenders and banks), said that assuming there had to be some kind of trade in Jahannum, it would be the trade of the money-traders. This description is an apt depiction of the so-called ‘Islamic’ banks of this era.

Whilst these neo-capitalist ‘Islamic’ banks have dubbed themselves ‘Islamic’, their very life-blood and breathing are Riba. Riba pulsates in every fibre of these banks and in the veins of the men who operate these banks of riba. They are men who are afflicted with the mental disease which the Qur’aan describes as Takhabbutush Shaitaan (mental derangement caused by shaitaan’s touch on the brains of man). Explaining this mental derangement, the Qur’aan Majeed states: “Those who devour riba, do not stand except as one who has been driven to insanity by the touch of shaitaan. That is because they (the bankers) say: ‘Verily, trade is like riba’. But Allah has made halaal trade and He has made riba haraam.” [Baqarah,  Aayat  275]


Their arrogation of the term ‘Islamic’ to portray themselves as holy Muslims of Islamic conscience, is a massive fraud perpetrated to beguile the ignorant and unwary masses. They have succeeded in hoodwinking unwary Muslims in search of loans and products with Islamic-sounding nomenclature for which they have acquired the rubber-stamp approval of hired mercenary scholars (miserable molvis and sheikhs) who are trading the Aayaat of Allah Ta’ala for a despicable worldly price. In the process of perpetrating their activities of sanctioning the haraam riba products of the haraam neo-capitalist ‘Islamic’ banks, these vile scholars and slaves of money have brought themselves within the full scope and glare of the Hadith in which Rasulullah (sallallahu alayhi  wasallam) describes them as ‘swines garlanded with gold and silver’. These mercenary molvis and sheikhs are among the vilest scum which inhabits the earth. This is the comment of Rasulullah (sallallahu alayhi wasallam) who said:

“Soon will there dawn an age when the worst of mankind under the canopy of the sky will be their ulama. From them (these ulama-e-soo’) will emerge fitnah, and the fitnah will rebound on them.”


Their riba products are labelled most deceptively with Islamic-sounding terms such as Mushaarakah, Mudhaarabah, Muraabaha, and most audaciously, even Qardh-e-Hasanah (Beuatiful Loan). They are vampires which suck and exploit Muslims who have suffered the calamity of entanglement with their haraam riba products.

All these haraam ‘Islamic’ banks, all over the world, are of the same brand, and all the ‘scholars’ sitting on the stupid ‘shariah boards’ of these neo-capitalist banks, are hirelings and mercenaries who miserably sell the Qur’aan and its Shariah for dollars. The hired scholars are paid tens of thousands of dollars for churning out corrupt and baatil fatwas of jawaaz (verdicts of kosher). The authors of a recent article, ‘Financial Fatwas’ state: “The top Islamic scholars (sic) make as much as $1 million a year determining whether offerings comply with Shariah.” These so-called scholars are downright stupid as far as the Shariah is concerned. With their smattering of textual knowledge they mutilate, distort and destroy the Shariah to produce their verdicts of permissibility solely for gratifying their dollar-lust.

All the major kuffaar banks of the world have a variety of haraam ‘Islamic’ products sanctioned as halaal by the mercenary scholars sitting on the stupid ‘shariah’ boards which banks have formed specifically for manufacturing verdicts of permissibility. Banks never pay tens of thousands of dollars to stupid ‘scholars’ for fatwas of prohibition. They pay handsomely for ‘fatwas of jawaaz’. The rationale of kuffaar and semi-kuffaar ‘Islamic’ banks for establishing ‘shariah’ boards is nothing other than a machine for fabricating fatwas of jawaaz for just any riba product. The job of the hired mercenaries operating in the guise of ‘ulama’ is to dig out obscurities from just any Math-hab to assemble patchwork corrupt fatwas of permissibility to enable the riba-devourers to market their riba products in Muslim countries and in Muslim communities.

There is no difference of any kind between the kuffaar banks and these so-called ‘Islamic’ banks. All banks of whatever hue and persuasion are structured on the primary basis of Riba. But the Muslim capitalist entrepreneurs with the aid of their hired ‘scholars’ of corruption who apply their rubber stamps of approval for the sake of the haraam boodle, have failed to take notice of the ultimatum of War which Allah Ta’ala has issued to them. The Qur’aan Majeed, issuing this ultimatum, says: “And if you do not desist (from plying your riba trade), then take notice of war from Allah and His Rasool.” [Baqarah, Aayat 279]

There is nothing Islamic about these banks. All their products are haraam. Abstention from dealing with them is Waajib. If circumstances constrain dealing with a bank, the lesser of the evils is to deal with non-Muslim banks. Dealing in riba with a Muslim is worse than dealing in riba with a non-Muslim.

Muslims have become so thoroughly impervious to the poisons of riba and haraam food, that they no longer feel any restraints or agitation of conscience when dealing with and devouring haraam. It is essential for our moral and spiritual well-being and safety and success of our Aakhirah to understand the imperative need to abstain from riba. Rasulullah (sallallahu alayhi wasallam) said that riba is a conglomeration of more than 70 major sins, the lightest of which is like fornicating with one’s own mother. This is the type of spiritual filth and carrion which the hired mercenary ulama-e-soo’ of the ‘shariah boards’ of the neo-capitalist ‘Islamic’ banks rubber stamp with their corrupt and baatil fatwas of permissibility for the acquisition of the haraam dollars which the banks pay for their evil fabrications. Whether the product is a so-called mushaarakah or mudhaarabah or muraabahah deal, the net result is worse than the undisguised interest transactions of the kuffaar banks. From the Shariah viewpoint, the contract is haraam. From the mundane perspective, the ‘financial’ charges (i.e. the disguised riba) is more than the undisguised interest which the non-Muslim banks charge.


In the beginning the Muslims used gold and silver by weight and the dinar and dirhams that they used were made by the Persians.

The first dated coins that can be assigned to the Muslims are copies of silver dirhams of the Sassanian Yezdigird III, struck during the Khalifate of Uthman, radhiyallahu anhu. These coins differ from the original ones in that an Arabic inscription is found in the obverse margins, normally reading “In the Name of Allah”. Since then the writing in Arabic of the Name of Allah and parts of Qur’an on the coins became a custom in all mintings made by Muslims.

Under what was known as the coin standard of the Khalif Umar Ibn al-Khattab, the weight of 10 dirhams was equivalent to 7 dinars (mithqals)

In the year 75 AH (695 CE) the Khalifah Abdal Malik ordered Al-Hajjaj to mint the first dirhams, thus he established officially the standard of Umar Ibn al-Khattab. In the next year he ordered the dirhams to be minted in all the regions of the Dar al-Islam. He ordered that the coins be stamped with the sentence:  “Allah is Unique, Allah is Eternal”. He ordered the removal of human figures and animals from the coins and that they be replaced with letters.

This command was then carried on throughout all the history of Islam. The dinar and the dirham were both round, and the writing was stamped in concentric circles. Typically on one side it was written the “tahlil” and the “tahmid”, that is, “la ilaha ill’Allah” and “alhamdulillah”; and on the other side was written the name of the Amir and the date. Later on it became common to introduce the blessings on the Prophet, salla’llahu alayhi wa sallam, and sometimes, ayats of the Qur’an.

Gold and silver coins remained official currency until the fall of the Khalifate. Since then, dozens of different paper currencies were made in each of the new postcolonial national states created from the dismemberment of Dar al-Islam.

Allah says in the Qur’an: And amongst the People of the Book there are those who, if you were to entrust them with a treasure (qintar), he would return it to you. And amongst them is he who, if you were to entrust him with a dinar would not return it to you, unless you kept standing over him. [Qur’an (3:75)]

Qadi Abu Bakr Ibn al-Arabi (Rahimahullah), the greatest authority on Qur’ânic Law wrote in his famous “Ahkam al-Qur’an” about this ayat:

“The benefit that can be taken from this is the prohibition of entrusting the People of the Book with goods”. 

Qadi Abu Bakr said: “The question concerning entrusting property is legislated by the text of Qur’an.” This means that the ayat is a legal judgement of absolute validity and of the greatest importance to the deen.

Entrusting wealth to non-Muslims is not allowed, but furthermore, taking a non-Muslim as a partner outside Dar al-Islam (where we stand over them) is extremely restricted, because they might cheat or might use our wealth in forbidden transactions.

Since paper-money is a promise of payment, can it be permitted to trust the issuers while they hold the payment (our property) outside our jurisdiction? History has also demonstrated repeatedly that paper money has been a permanent instrument of default and cheating the Muslims. In addition, Islamic Law does not permit the use of a promise of payment as a medium of exchange.


From the beginning of Islam until today, the value of the Islamic bimetallic currency has remained surprisingly stable in relation to basic consumable goods:

A chicken at the time of the Prophet, salla’llahu alaihi wa sallam, cost one dirham; today, 1,400 years later, a chicken costs approximately one dirham.

In 1,400 years inflation is zero. 

Could we say the same about the dollar or any other paper currency in the last 25 years?

In the long term the bimetallic currency has proved to be the most stable currency the world has ever seen. It has survived, despite all the attempts by governments to transform it into a symbolic currency by imposing a nominal value different from its weight.


Gold cannot be inflated by printing more of it; it cannot be devalued by government decree, and unlike paper currency it is an asset which does not depend upon anybody’s promise to pay.

Portability and anonymity of gold are both important, but the most significant fact is that gold is an asset that is no-one else´s liability.

All forms of paper assets: bonds, shares, and even bank deposits, are promises to repay money borrowed. Their value is dependent upon the investor’s belief that the promise will be fulfilled. As junk bonds and the Mexican peso have illustrated, a questionable promise soon loses value.

Gold is not like this. A piece of gold is independent of the financial system, and its worth is underwritten by 5000 years of human experience.

Related Reading: The Reality of The Paper Currency and its Connection to the Dajjalic World Order

Islamic Refutation of Capitalist Economic System


Economic Justice In Islam


Two major economic systems have dominated the world arena in the last 100 years, namely Capitalism and Socialism. Socialism collapsed before the end of the 20th century with a complete failure, and hence will not be a subject in this discussion. Capitalism continues to dominate the entire globe, with different flavors and varieties implemented in different parts of the world. The dissatisfaction of people under socialism, and the accompanying pain and suffering have ended, but been replaced by yet another type of pain and sufferings.

After the collapse of Socialism, Capitalism entered an era of global economy, Globalization, thus impacting most of the people in the world. Therefore, this discussion explores the impact of capitalism on the world and the plight of people in poor and rich countries. On the other hand, it introduces an economic system that the world is yet to explore, understand, and implement. This system is based on Islam.

The Economic System

Economic system is a set of rules and regulations, which define how to distribute the wealth, how to possess it, and how to spend or dispose of it. This system (set of rules) is based upon a particular viewpoint in life, or ideology. Therefore, the economic system of Islam is different from that of Socialism/Communism and that of Capitalism, since each of these systems follows its own ideological viewpoint. For example, the rules of possession and ownership under Capitalism differ from the rules of possession under Socialism, and from those under Islam.

Economic science deals with the production, its improvement, invention and improvement of its means. Economic science, as is the case with other sciences, is universal to all nations and is not associated with a particular ideology. For example, the improvement of production is a technical issue, which is purely scientific, and does not depend on a particular ideological viewpoint.

In addition to the essential understanding of the difference between the economic system and economic science, it is critical to understand the factors of success for any system. The success or failure of an economic system is measured by the direct impact on the humans who live under it. Measures of such impact are the level of security provided and satisfaction of needs. Security and satisfaction of needs are further measured in terms of:

⚫ Food security
⚫ Health security
⚫ Educational security
⚫ Conviction and trust in the economic foundation

In the next section we will address Capitalism as the dominating economic system today, its truth, reality, applicability and consequences.

The Capitalist Economic System

Theoretical Foundation

Capitalism addresses the materialistic side of life; it addresses the human needs and the means of satisfying those needs. It is established on three principles:

1. Relative scarcity of goods in relation to needs.

2. The economic value of a product

3. Pricing role in production, cons consumption, and distribution.

Relative Scarcity:

Man has needs that require satisfaction. Capitalism views the human needs as purely materialistic, such as the need for food, clothing, medicine, education, and security. As for the moral needs such as pride and honor, or spiritual needs such as the sanctification of God’s will, they are not recognized economically, and are therefore disregarded and have no place in economic studies within the capitalist system.

The capitalist looks at the means of satisfaction, that is, the commodities and services, from the viewpoint that they satisfy a need, without taking any other factor into consideration. This system considers, for example, wine as an economically beneficial product because it satisfies the need of some, and perceives the wine maker as service provider. Because wine and wine providers satisfy a need it is considered as having an economic value. Since the need in the capitalist view means a desire, then anything desired, whether it is essential or not essential, beneficial or harmful, it is considered economically beneficial. Products may be considered beneficial from an economic viewpoint even if the public opinion considers them of no benefit, or even harmful. Thus wine, tobacco, drugs, guns, and apples are beneficial things since there are people who desire them. Stocks, interest based loans are also beneficial as long as there is someone who would benefit from their use.

As such, capitalism does not concern itself with the societal values other than materialistic ones. Therefore, the capitalist economic system’s primary function is to supply goods – commodities and services – that is, to provide the means of satisfying man’s needs, irrespective of any other consideration. Capitalism recognizes that man has basic needs, which must be satisfied, and wants which increase in number as man proceeds to a higher level of urbanization.

Relative scarcity foresees the economic problem as the relative shortages of commodities and services towards the unlimited and constantly growing human needs (wants). This basic principal of capitalist economic philosophy provides the basis for the definition of the economic problem under capitalism. In particular, the problem that capitalism attempts to resolve is the satisfaction of an ever growing human needs using insufficient resources and means of satisfaction. This is the essence of relative scarcity of products. An economic dilemma that cannot be resolved no matter how much commodities and services are produced, thus setting unrealistic goal to be achieved.

The inevitable consequence of relative scarcity is that the focal point of a capitalistic society is the increase production of products and services. However, the distribution of the products over the needs is fully dependents upon the individual ability to obtain it. It should be noted that in a capitalistic society the problem is to make the resources available so as to satisfy the needs in a society, but not necessarily the needs of every individual. It is not surprising therefore, that the main focus of the economy under capitalism is the increase in the national production emphasized by the Gross Domestic Products (GDP) and Gross National Products (GNP). Capitalism views economic growth, the increase in GDP and GNP, as the mean of solving the problem of poverty. There are serious flaws in these principals:

1. Correlation between the needs and the means of satisfaction

Under Capitalism, production and distribution are considered to be one major subject. Capitalism holds one view towards the economic science and the economic system without differentiating between them. However, there is a major difference between the economic system and economic science as previously defined. The integration between production of the economic material and the manner of its distribution, is a fundamental fault in the capitalist system which is bound to cause failure in the economy.

2. The human needs are not materialistic only

The reference to the needs, which require satisfaction as being purely materialistic, is wrong, and contradicts the natural reality of human needs. Human beings have moral, spiritual, and ethical needs that require satisfaction, which in turn require commodities or services for their satisfaction.

3. Commodities and services relation to the society

Man is viewed by capitalists as a purely materialistic creature, with no relevance to his spiritual needs, ethical thoughts, and moral objectives. Thus, Capitalism does not give weight to Societal values, except to the materialistic value of the product and its profitability. Cheating in the economic sense is valuable as long as it leads to profitability (Enron and Arthur Anderson). Monopoly is feasible economically, while it can be maintained and supported (Microsoft). Under Capitalism, feeding a poor (wealth distribution) may be done only if it brings a material benefit, such as tax break (non profit organizations). The Capitalist economy focuses on the satisfaction of needs and wants irrespective to the societal values and needs. Societal values and needs are protected as much as it does not limit the individual pursuit of satisfaction.

The exchange of resources and efforts among people creates relationships according to which the structure of the society is formed. Thus, viewing the economic commodity as a mean of fulfilling a need, without caring for the societal values, violates a fundamental rule of society structure. The effect on society should be perceived when considering the economic commodity. Therefore, it is incorrect to consider a thing as beneficial just because there is somebody who wants it, whether it affects the relationships among people or not, and whether it is prohibited or permitted in the belief of the people. Rather things should be considered beneficial if they are really beneficial in respect to what the society should be.

Therefore, it is incorrect to consider alcohol, cannabis, opium, explosives, guns, tobacco and the like as beneficial commodities and to consider them economic commodities just because there is somebody who wants them. Instead, the effect of these economic commodities on the relationships between people in society must be considered when considering the benefit of things i.e. when considering the goods as an economic commodity or not. It is a system fault to look at a product merely as it is, regardless of what the society should be.

4. Poverty of individuals is the main economic problem

Capitalism concentrates on production of wealth more than distribution of wealth. The importance of distribution of wealth to satisfy the needs has become a secondary issue. Therefore, the capitalist economic system main aim is to increase the country’s wealth as a whole, and it strives to achieve the highest possible level of production. The achievement of the highest possible level of satisfaction for the members of society is viewed as a result of increasing the national income, the gross national product. In the capitalist view this can be achieved by raising the level of production in the country, and by enabling individuals to acquire the wealth as they are left free to work and produce.

So the economy does not attempt to satisfy the needs of the individuals and to facilitate the satisfaction of every individual in the community, rather it is focused on raising the level of production and increasing the national income. Only then the distribution of wealth among the members of society occurs, by means of freedom of possession and freedom of work. So it is left to the individuals to acquire what they can of the wealth. Everyone strives to get his/her share of the wealth using whatever means, skills, or tools he/she can afford. Whether the individual is or is not able to satisfy his/her needs is not of concern to the economy, as long as the production of goods continues to grow, and the wealth continues to grow.

This is the major principal of the capitalist economy. It is inherently faulty, and contradicts reality and does not lead to an improvement in the level of livelihood for all individuals, and does not fulfill the basic needs of every individual. It does not resolve the issue of poverty for the individuals, despite the massive increase in the production of goods and services.

The hard fact in this reality is that the needs, which require satisfaction, are individual needs. They are needs of particular people such as George, Maria, Hessian, Muhammad, and the like. The fact that the needs of George, for example, are satisfied does not make Maria any better, unless her needs are also taken care of. So these are needs of individuals and not needs for a group of human beings, a group of nations, or a group of people. Therefore, the economic problem must focus on distributing the means of satisfaction for all the individuals of a society. In other words, the distribution of the funds and benefits must reach every member of the nation or people. It is not sufficient to increase the wealth of the group, irrespective of the plight of every individual.

Consequently, the study of the factors that affect the size of national production differs from the study for satisfying all the basic needs of all individuals personally and completely. The subject of study must be the basic human needs of man, as a human being, and the study of distributing the wealth to the members of society to guarantee the satisfaction of all their basic needs while allowing them to pursue the satisfaction of their wants & luxury needs. This should be the subject of study, and should be undertaken in the first place. Moreover, resolving the poverty of a country does not resolve the problem of poverty for individuals. On the contrary, resolving the poverty of the individuals, and the fair distribution of the wealth of the country, motivates all the people of the country to work towards increasing the national income and resolving poverty of the country. Yet, the study of factors that affect the size of production and the increase of the national income should be discussed within the framework of economic science, rather than in the discussion of the economic system.

5. Scarcity of resources is not the problem and human needs are limited

Capitalism views the economic problem, which faces any society to be the scarcity of commodities and services. It claims that the human needs are steadily increasing, and the products continue to be too scarce to satisfy the growing needs of the people. This view is erroneous and in fact contradicts with reality. This is because the needs, which must be met, are the basic needs of the individual as a human (food, shelter, education, health and clothing), and not the luxuries, although they too are sought. The basic needs of humans are limited, and the resources and products, which they call the commodities and services, are certainly sufficient to satisfy the basic human needs. It is possible to satisfy all of the basic needs of mankind completely.

The economic problem is, in reality, the distribution of these resources and services enabling every individual to satisfy all basic needs completely, and after that helping them to strive for attaining their luxuries. The basic needs of man as a human do not increase. Only the luxurious needs that may increase and vary due to higher urbanization.

Practical Implementation

The discussion of the capitalist economic system leads to the conclusion that the implementation of this system over a period of time should lead to a profound poverty and severe dissatisfaction for any society. In this section, we will examine actual data from the contemporary world that lives under the domination of capitalist economic systems. The data shows without any doubt that the theoretical errors of the major economic principals have led to serious failures that cause huge catastrophic effects on a very large number of the population in the world.

Hunger under capitalism

Growing out of a Harvard School of Public Health conference on hunger, The Physician Task Force on Hunger in America was established in early 1984. The major findings and
conclusions of the Task Force include:

⚫ Hunger is a problem of epidemic proportions across the nation
⚫ Hunger in America is getting worse, not better
⚫ Malnutrition and ill-health are associated with hunger
⚫ is the result of federal government policies
⚫ Present policies are not alleviating hunger in America

Conclusion: Resolution of hunger and poverty require fundamental change at the level of the economic system. Capitalism is designed to produce poverty not to resolve it.

Globalization is the newer form of global capitalism. It is capitalism across nations. Capital flows between nations without serious constraints. Products move from the producing origins to consuming destinations without the feel of borders or national
barriers. Again, the production of resources and wealth increase and multiply. But the impact of the tremendous growth of wealth does not find its way to satisfy the needs of the people. Consider this report on globalization:

“The Scorecard on Globalization 1980-2000: Twenty Years of Diminished Progress”

By Mark Weisbrot, Dean Baker, Egor Kraev and Judy Chen

For economic growth and almost all of the other indicators, the last 20 years have shown a very clear decline in progress as compared with the previous two decades. Among the findings:


The fall in economic growth rates was most pronounced and across the board for all groups or countries. The poorest group went from a per capita GDP growth rate of 1.9 percent annually in 1960-80, to a decline of 0.5 percent per year (1980-2000). For the middle group (which includes mostly poor countries), there was a sharp decline from an annual per capita growth rate of 3.6 percent to just less than 1 percent. Over a 20 year period, this represents the difference between doubling income per person,versus increasing it by just 21 percent. The other groups also showed substantial declines in growth rates.

Life Expectancy:

Progress in life expectancy was also reduced for 4 out of the 5 groups of countries, with the exception of the highest group (life expectancy 69-76 years). The sharpest slowdown was in the second to worst group (life expectancy between 44-53 ears)..

Infant and Child Mortality:

Progress in reducing infant mortality was also considerably slower during the period of globalization (1980-1998) than over the previous two decades. The biggest declines in progress were for the middle to worst performing groups. Progress in reducing child mortality (under 5) was also slower for the middle to worst performing groups of countries.

Education and literacy:

Progress in education also slowed during the period of globalization. The rate of growth of primary, secondary, and tertiary (post-secondary) school enrollment was slower for most groups of countries.

Globalization and Inequality Among Nations

According to this “old fashioned – three worlds partition” partition, 76 percent of world population lives in poor countries, 8 lives in middle income countries (defined as countries with per capita income levels between Brazil and Italy), and 16 percent lives in rich countries. Now, if we keep the same income thresholds as implied in the previous division, and look at “true” distribution of people according to their income (regardless of where they live), we find a very similar result: 78 percent of the world population is poor, 11 percent belongs to the middle class, and 11 percent are rich.

Economic health or illness?

The most important index of economic well being under capitalism is the index that monitors the growth of the nation’s health as a whole. DOW Jones, NASDAQ, NIKO, NYSE and other indexes monitor the status of the nation’s most powerful companies. A steady increase of these indexes does not record, reflect or impact the status of the poor in the nation. In fact, the overwhelming data shows that poverty and hunger persist despite the steady increase of economic indexes over the years. The daily report of the economic indexes prove one more time that capitalism is inherently concerned about the growth of products, rather than the satisfaction of the needs of people.

Virtual Wealth

The obsession of product and wealth growth under capitalism has resulted in the removal of the boundaries between the products and services and money. The monetary system existed in the first place to represent the values of products and services in a mobile transferable format. For centuries, gold and silver provided a solid base for measuring the exchange value of products and services. Under the pressure of growing economic product growth, the US capitalist economists canceled Briton Woods treaty which establishes a fixed exchange rate for gold, thus making gold one more commodity. The devastating result of this action is the creation of a new environment where wealth has become virtual wealth. By virtual wealth, I mean the growth of money independent of the growth of products and services. The two major factors that lead to the unlimited growth of money are the interest (usury) and stock investments. Interest allows money to grow without the involvement of product and services. The values of stocks increase or decrease quite often based on circumstances, politics, stability, and other factors not directed to the products and services provided by the stock holding company. The phenomenon of DOT.COM in the 1990’s is a clear example.

Islamic Economic System

Before nudging in the discussion of the economic systems and their impacts on us as
people, I would like to lay down a foundation regarding Islam.

Islamic Sources

Islam is a religion in the sense that it is based on a belief in God (the creator) and in the accountability to God on the Day of Judgment. Islam is also an ideology in the sense that it comprises an ideological foundation and a system of laws for the individual and the society. The Islamic systems cover the political, economic, and social systems. Islam is founded upon the fundamental principal that man, life, and universe are all the creations of the eternal, one and only one God whose main name in Islam is Allah. Allah possesses many attributes, all of which are considered to be eternal and unbounded.

The belief in the existence of God, the Eternal Creator, is a rational process in Islam and an obligation upon the reasoning facility of the human. The belief in God under Islam requires also the belief in all His attributes and functions. Belief in God, as such, requires the belief that there needs to be a channel through which God communicates to the people the means and ways to worship. This channel is what is known as Prophethood and/or the Messenger. Worshipping Allah, under Islam, is the process of following the guidance revealed by God through His Messengers and/or Prophets. Islam considers the belief in the Prophethood an essential principal of Islam. The Prophets include Adam, Ibraheem, Isaac, Moses, Jesus, Muhammad (Peace Be Upon Them All) and many others. Islam, as a religion and ideology, is based entirely on what is revealed to Mohammad (Sallallahu alayhi Wasallam). The revelation to Muhammad (Sallallahu alayhi Wasallam) has two forms. One form is the Quran, which is the actual word of Allah the creator. The wording and the meanings of the verses are written into the Quran exactly as revealed to Muhammad (Sallallahu alayhi Wasallam). The Quran was compiled and completely written during the life of the Messenger Muhammad (Sallallahu alayhi Wasallam). The other format of the revelation is what is known in Arabic as the “Sunnah” of Muhammad (Sallallahu alayhi Wasallam). The Sunnah comprises statements, actions, and endorsement of Muhammad (Sallallahu alayhi Wasallam). The Sunnah is also a revelation from God to Muhammad (Sallallahu alayhi Wasallam), except that the wording of the Sunnah is left to Muhammad (Sallallahu alayhi Wasallam). The Sunnah was compiled and authenticated after the death of the Prophet (Sallallahu alayhi Wasallam) based on written statements and verbal narrations.

For a view to be considered an Islamic one, it has to be validated through the Qur’an and the Sunnah. In this lecture, I will trace the Islamic economic system through the verses of the Qur’an and the statements of the Sunnah.

The View of Islam towards the Economy

Allah created all resources in the world

In the Qur’an, Allah states that all the resources in the world are created by Him, and made usable to the humans:

“It is He who created for you all that exists on earth.” [Al-Baqarah: 29]

“Allah is He Who put at your disposal the sea so that the ships may sail by His command, and so as you may seek His bounty.” [Al-Jathiyah: 12]

“He put at your disposal that which is in the heavens and that which is in the earth, all from Him.” [Al-Jathiyah: 13]

“And We sent down iron, in which is great might, as well as many benefits for mankind.” [Al-Hadid: 25]

“Let man consider his food. How We pour water in showers. Then split the earth in fragments. And cause the grains to grow therein. And grapes and fresh vegetation. And olives and dates, and enclosed gardens, dense with lofty trees. And fruits and grazes. Provision for you and your cattle.” [Surah Abasa: 24-32]

These examples indicate that technical means of production is left to the people. It is apparent that Islam focuses on the economic system (distribution of wealth) and not economic science (technical production).

Economic Policy in Islam

The economic policy is the objective of the laws, which deal with the management of human basic needs (food, shelter, education, health, security). The Islamic economic policy could be understood from the statement of Prophet Muhammad (Sallallahu alayhi wasallam):

“Whom who wakes up secure at home with healthy body and food for his day as if he acquired the whole life”.

The Prophet (Sallallahu alayhi wasallam) also states:

“Allah breaks covenant with any group of people living in a close vicinity, whereby one of them goes to bed while hungry”.

The economic policy in Islam aims at securing the complete satisfaction of all basic needs for every individual, and to enable each individual to purse the satisfaction of their luxuries. Islam looks at every individual as a human being whose basic needs to be satisfied completely, then it looks to him in his capacity as a particular individual, to enable him to satisfy his luxuries as much as possible.

On the other hand, Islam views the individual as part of a whole society that lives according to certain rules and regulations that have to be taken into consideration.Therefore, the purpose of the economic policy in Islam does not address how to raise the standard of living in the country without securing the rights for every individual. Nor is it just to provide the means of satisfaction in the society without setting wealth distribution processes.

The Islamic economic objective is achieved through multiple laws and regulations:

First, defining property ownership as being of three kinds:

1. Individual ownership
2. Public ownership
3. State ownership

The individual can own anything except that of what is public property or prohibited materials such as alcohol or pigs. The public owns all minerals of the earth that are not limited by nature such as gold and silver mines, oil fields, natural gas fields, etc. or all things that are publicly shared such as seas, rivers, roads etc. The state owns certain revenues including land taxation called (Kharaj). Such laws allow for fair distribution of wealth and allow the state to provide public services, security, healthcare, education and others.

Second, Islam prohibits any kind of Usury and interest based loans, on the other hand it encourages partnership in different ways (but not Joint Stock Companies) and interest free loans. Also, Islam prohibits monopoly allowing for true competition and opportunity.

Third, Islam obliges each capable person to work, so as to achieve the basic needs for himself and his dependants.

Fourth, through the unique Islamic social structure based around protecting the family,Islam obliges adult males to support their parents once the father is not able to work or passed away. If there are no one in the family who can support then the State Treasury (Bait ul-Mal) has to step in. As such, Islam requires that the individual secure for himself and his dependants the satisfaction of the basic needs i.e. adequate food, clothing, education, medication and housing. Islam then encourages the individual to secure the luxuries of life as much as he can.

Fifth, Islam prevents the government from the imposition of taxes, except in cases of public disasters such as famine, and where the state funds are unable to cover expenses. Tax then is imposed for a limited time and taken only from the wealthy.
Through the combination of spiritual, social and economic drives, the Islamic economic system achieves the right of livelihood for everyone individually, and facilitates the securing of the luxuries.

To achieve the societal values within which the individual lives, Islam sets certain rules and regulation within which the individual is to behave while striving to secure his/her needs. For example, Islam prohibits the production and consumption of wine by Muslims, and it does not consider it an economic material. Islam prohibits the taking of riba (usury, interest, etc.) and its usage in transactions for everyone who holds Islamic citizenship. It does not consider riba as an economic commodity, whether for Muslims or non-Muslims. Islam considers what the society ought to be when utilizing any property.

Islam did not detach the individual from being human, nor the human being from being a particular individual. Furthermore, Islam does not consider what the society ought to be separate from the issue of securing the satisfaction of the basic needs for every individual, and enabling him/her to satisfy the luxuries. Rather, Islam makes the satisfaction of the needs and what the society ought to be, as two inseparable issues.For the sake of satisfying all the basic needs completely, and to enable satisfaction of the luxuries, the economic commodity should be available to people, and it will not be available to them unless they strive to earn it. Provided that there is a system that protects the basic integrity of the human being. Therefore, Islam urges people to earn,seek the provision and strive without the fear of not finding food to eat or secured home to return back to at the end of the day. Islam made striving to earn the provision compulsory upon Muslims thus creating a productive society.

Allah said:

“So walk in the paths of the earth and eat of His sustenance which He provides.”  [Al-Mulk: 15]

Many Ahadith came to encourage the earning of property. In one Hadith, the Prophet Muhammad _ shook the hand of Sa’ad ibn Muadh (ra) and found his hands to be rough. Sa?ad said: “I dig with the shovel to maintain my family.” The Prophet (sallallahu alayhi wasallam kissed Sa’ad’s hands and said: “(They are) two hands which Allah loves.”

The Prophet (sallallahu alayhi wasallam) said: “Nobody would ever eat food that is better than to eat of his own hands work.”

It was narrated that ‘Umar Ibn Al-Khattab (Radhiyallahu anhu) passed by some people who were consistently in the Mosque reading the Qur’an (meaning not working). He asked who they were. He was told: “They are those who depend upon Allah (Al-Mutawwakiloon).” ‘Umar replied: “No, they are the eaters who eat the people’s properties. Do you want me to describe those who really depend upon Allah (Al-Mutawwakiloon)? He is the person who throws the seeds in the earth and then depends on his Lord The Almighty,
The Exalted (Azza wa jall).”

Thus we find that the verses and the Ahadith encourage striving to seek provision, and working to earn property, just as they encourage the enjoyment of the property and eating of the good things.

Allah said:

“Say: who has forbidden the beautiful gifts of Allah, which He has provided for His servants, and the things, clean and pure, (that He has provided)?” [Al-A’raf: 32]

“O you who believe! Spend of the good things which you have earned, and of that which We bring forth from the earth for you.” [Al-Baqarah: 267]

“O you who believe! Do not prohibit the good things which Allah made halal for you.” [Al-Ma’idah: 87]

These verses, and the like, denote clearly that the divine rules (Ahkam Shari’ah) related to the economy, aim at acquiring property and enjoying good things. So, Islam obliged individuals to earn, and ordered them to enjoy wealth that they earned, so as to achieve economic growth in the country, to satisfy the basic needs of every person, and to enable the satisfaction of his luxuries.

However, the economic progress through motivating every capable individual to work, assigning properties to the State and the investing of public property, all are means to satisfy the needs in the best possible manner. The Messenger of Allah (sallallahu alayhi wasallam) said:

“Whosoever sought the life (matters) legitimately (halal) and decently he will meet Allah with his face as a full moon; and whosoever sought it arrogantly and excessively will meet Allah while He is angry at him.”

The Prophet also said: “Do you have, son of Adam, of your property except that which you ate and consumed, that which you wore and exhausted, and that which you donated and preserved (for yourself in the hearafter)?”

Allah the Supreme said:

“Don’t commit Israaf (spending or going beyond the limits imposed by Islam); surely He (Allah) does not like those who condone Israaf.” [Al-A’raf: 31]

Islam made the aim of owning properties a mean towards satisfying the needs and not for the purpose of boasting. It required managing the economy according to Allah’s orders and made it obligatory. It ordered the Muslims to seek the Hereafter and the pleasure of the creator through what they earn and spend by their own well, without ignoring the goods of this worldly life.

Allah said:

“But seek the abode of the Hereafter in that which Allah has given you, and do not neglect your portion of worldly life, and be kind as Allah has been kind to you, and seek not corruption in the earth.” [Al-Qasas: 77]

Islam secured the observance of the rules in two ways complementing each other. First,Islam motivated the Muslims to adhere to this economic policy through the fear of Allah (Taqwa). Second, Islam legislated laws which the State implements upon the people.

Allah said:

“O you who believe! observe your duty to Allah and give up what remains (due to you) from riba, if you are (in truth) believers.” [Al-Baqarah: 278]

Analysis of the divine rules related to the economy, shows that Islam addresses the
issue of enabling people to utilize wealth. Islam addresses the initial acquisition of wealth, its disposal and its distribution amongst the public. The rules that deal with the economy are thus based on three principles:

1. Initial ownership,
2. Disposal of the ownership, and
3. Distribution of wealth amongst the people.

With regard to the issue of ownership, it belongs to Allah, since He is the Owner of all the Dominion (Malik al-Mulk). Allah stated in the texts that property (Maal) belongs to Him.

Allah said: “And give them from the property of Allah, which He gave to you.” [An-Nur: 33]

Property, therefore, belongs to Allah alone. However, He has put mankind in charge of property, provided them with it, and has given them the right of owning it.
Allah, the Exalted said:

“And spend from what He put you in charge of.”  [Al-Hadid: 7]

“O you who believe! observe your duty to Allah and give up what remains (due)”

“And He has provided you with properties and offspring.”  [Nuh: 12]

Islam also defined three types of ownership (as mentioned earlier):

1. Individual ownership
2. State ownership
3. Public ownership

Through the management of these types of ownership, the economy of both the society and the individuals are completely satisfied.

Zakat and Poverty

Islam has waged a war on poverty by all means. It is the poverty of the individual people that Islam is concerned with, in addition to the poverty of the nation as a whole. Islam has instituted the charity, called in Islam the “Zakat” in a manner that eliminates the poverty altogether. “Zakat” in Islam is a mean of worship. It is one of the pillars of Islam as much as the prayer is. The Islamic system aims at eliminating poverty from the society, rather than managing the poor. One of the companions of the Prophet Mohammad (sallallahu alayhi wasallam) and also one of the Guided Successors of Him, Ali Bin Abi Talib (radhiyallahu anhu) stated:

“If poverty were a man, I would certainly kill him”.

Practically, after few years of implementing Islam in the Islamic society, the notion of poverty was gone altogether. It is narrated in  history that during the era of the Khalifah ‘Umar Bin Abd al-Aziz, there was no single poor person within the Islamic  State who would accept the charity of the “Zakat”.

In a statement by Prophet Mohammad (sallallahu alayhi wasallam), he says:

“Allah breaks covenant with any group of people living in a close vicinity, whereby one of them goes to bed while hungry”.

The Islamic economic system defines the main problem to be solved by the system as the poverty of the individuals. The economic index, thus in the Islamic State, would be the percentage of people who live below poverty line. The economic strength and growth will be measured by the actual well-being of the individuals rather than by the well-being of NASDAQ or DOW JONES. What good would it do to the stomach of a poor person, if the NASDAQ gains or loses points? The Islamic Economic Index is based on the food that is available to each and every human soul in the society.

The Islamic economic system reserves the vital resources of the state for the well-being of the people. One or more companies under Islam for example, will not own the oil fields.The fact that a certain company was able to drill and exploit oil fields in Texas does not give it the right for the oil. The oil exists in fields that go beneath the houses and lands of millions of people. In Islam, the oil belongs to all the people in the state. This is not to be mistaking with socialism that dictates that all means of productions belong to the people. Thus, the Islamic system ensures that the vital resources that belong to the people be actually returned to the people. As such, poverty will never exist in any society that has vital resources.

Usury – Interest – Riba

Islam categorically prohibited the use of money to grow money, i.e., usury. Loans in Islam are given to others and considered a mean of worship. Allah declares that whoever gives a loan (no interest) to another person is indeed giving a loan to Allah. In return, Allah multiplies the reward for the loan giver.

Allah stated:

“Whoever gives a good loan to Allah; and Allah will multiply it to him many folds”

Islamic Economy: Reality

The harsh reality is that Islam as described in the Qur’an and Sunnah has been removed from the real life of the people (Muslims and non-Muslims alike) for almost a century. The Islamic State has been the responsible entity for implementing the Islamic systems during and after the death of the Messenger Mohammad (Sallallahu alayhi wasallam). The Islamic Nation continued to function (with ups and downs) until 1924, when Mustafa Kemal of Turkey with the help of western European capitalists managed to abolish the Ottoman Islamic state (Khilafah). Since then, the Muslims and non-Muslims in the entire world have been living under various secular systems, implementing capitalism in the economic life.

Muslims continued to believe in Islam and practice those parts of Islam that pertain to the individual. However, for Islam to produce the results and objectives set forth in the Qur’an and the Sunnah, the full implementation of Islam is necessary. Without full implementation of Islam, the results could be counter productive. As a result of the absence of Islam, the Muslims resorted to national bonds, ethnic traditions and values. Quite often and after decades of intentional misguiding, the Muslims mix their national values, national aspirations, and methods with those of Islam. The truth of the matter though is that Islam was revealed as a set of laws, regulations and systems to guide and manage the behavior of the society as well as the individuals.

The history of the life of Mohammad (sallallahu alayhi wasallam) shows that the objectives of Islam, the resolutions of Islam, and the values of Islam started to materialize only after the establishment of the Islamic State in Medinah, 13 years after the beginning of Islam. In fact, most of the laws, regulations, and systems were not revealed to Muhammad (sallallahu alayhi wasallam) except after his migration to Medinah where the state was established. The laws of the Zakat, riba (usury), ownership, and wealth distribution were revealed after the state was created.


Islam as a religion and ideology needs to be revisited by both Muslims and non-Muslims alike. It is a religion that should be looked at as a continuation of previous religions and inheritor of them as well. As an ideology, Islam should be viewed as one that provides economic, political, and social systems that do not belong to the ideologies of materialism (both capitalism and socialism). After the fall and collapse of socialism, the people of the world resorted to capitalism as their only alternative. The collapse of capitalism is eminent as a natural consequence to its inability to address the human needs in a satisfactory manner. It is the responsibility and the duty of the people of the world to examine Islam with serious and sincere scrutiny, in order to consider it as the only viable alternative to capitalism.



The following is a verbatim reproduction of an article by a Deeni Student of the U.K.

“In a classic case of Juhala seeking and obtaining Fatwas from even worse Juhala, the garbage below was written and published by the self-appointed Mufti, Muadh Khan, in response to some queries posed on a website called “Muftisays”. I hope Hazrat is able to make a quick perusal.


Shariah Problem with Islamic Mortgage:

The problem with Islamic mortgage isn’t what a famous Mufti keeps moaning about. The problem isn’t even what the Scholars of Karachi keep castigating Mufti Taqi Usmani (HA) about!

The Islamic problem is that Islamic mortgage is essentially two contracts rolled into one:

Contract 1: Bank actually owns the property and the deed is in their name.

Contract 2: Bank rents the property to you but it is not a traditional rental agreement and part of your payment goes toward the capital loan (i.e. price of the property).

There are many Scholars who “correctly and rightly” say that you cannot have multiple contracts for the same transaction. There is no need to look beyond this problem into interest or (lack of interest), this entire issue is deeply problematic to begin with.

Sceptics are right in the sense that “Islamic mortgage” is a legal jargon filled transaction designed to get around the traditional “Haram Mortgage” transaction. In reality and in effect, the net transaction is no different. Let me illustrate this to you by an example, suppose you want to borrow money from me to get a car, I can do this in two ways. Suppose that the car costs 5,000 US Dollars here are two ways:

1. Interest Based: I can lend you 5,000 USD and you pay £153.89 for 36 months at the rate of 7%

2. Service Based: I can lend you 5,000 USD BUT I say for my Services you need to pay me back 5,540.20 and you pay £153.89 for 36 months

1 is Haram

2 is not directly Haram as long as we both agree and come up with some legal mumbo-jumbo

Mufti Taqi Usmani (HA) responds:

15 years ago this was put to Mufti Taqi Usmani Saheb (DB) that isn’t Islamic Mortgage (HSBC) just legal mumbo-jumbo to get around the Interest prohibition? Mufti Taqi Usmani Saheb (DB) replied that Islamic Mortgage isn’t perfect but it is for the convenience of Muslims to avoid Haram, it is the best solution we have at this time when we don’t control the financial markets and world economy and there is always room for improvements.

A student of Mufti Taqi Usmani (DB) answered by using this example:

Suppose while driving in UK you want to turn right (or left in US and the example will make sense). You see a Petrol Station (Gas station for US) and instead of going to the traffic lights and turning right properly, you cut across the station and save time and keep on going. This isn’t strictly illegal but it may be not the right behaviour or up to ethical standards of driving.

Islamic Mortgage isn’t “Strictly Haram” but it isn’t agreed upon “Halal” according to all scholars either. This is where Taqleed comes in, I had this argument on Sunniforum with the then (student and now Mufti) Abu Hajira. As a layman Muslim, Allah Ta’ala commands you to make Taqleed so if you choose to follow someone like Mufti Taqi Usmani (HA) and get an Islamic Mortgage or any other (well known and trusted scholar for that matter), there is no sin on you!

This is the bottom line you need to grasp!


What is in it for the Banks?

Banks are in there to make money and Islamic (banking) or Mortgages offers the following advantages:

1. Statically,  Muslims are financially stable with stable families and pay loans back because it is bred and drummed into Muslims to look after their families so loans to Muslims are less risky.

2. Muslims have close knit families so they are able to pay greater down payment and families often bail those out who are in trouble

3. Muslims are a financial powerhouse in the world and ready to invest

4. MOST IMPORTANT: Banks have to show a reserve against which they are given permission to lend against. Islamic Mortgages means that they have to ring-fence certain money which CANNOT be invested into what you would deem “high risk investments” and this secures their bottom line. So by investing in “Islamic Banking” they are able to leverage this amount TWICE

Muslims are their own worst enemies!

There was a time when HSBC, IBB, Bank of Kuwait etc were all competing in the UK for Muslim businesses. Barclays was also trying to get into the market but BECAUSE Muslims are “stupid” and short-sighted they didn’t kept discussing Fatwaas and market has now narrowed with HSBC and Barclays falling out. This means that you have niche banks in the business and with the lack of competition, customer lose out. Scholars should have sat together and worked out better contracts and agreed with each other for the sake of British Muslims INSTEAD

You have some scholars who have made a killing by earning money WHILE others are crying Haram, Haram and normal Muslims are confused!

WHAT SHOULD HAVE HAPPENED is that Muslims should have made sure that banking scrap and fight for their money (like what happens in the traditional market) and ensured that Islamic Mortgage is diversified as a viable product for everyone. Islamic Banking is just another form of ethical banking and that is why world’s top banks are offering it worldwide.

Islamic Mortgage is a niche product which is limited (or we have made it limited) and the competition is making it more expensive when it was actually cheaper.” (End of the Jaahils appraisal)

The Student Commenting further says:

It seems Muadh Khan, along with those of his ilk, are becoming increasingly flustered with the increasing number of sincere  brothers and sisters who are having to turn eventually to the Majlis, simply because there does not appear to be any other Ulama proclaiming the Haqq loudly, clearly, and without forked tongues. Allah Ta’ala works in wonderful and mysterious ways. The unprecedented Satanism propounded by the Ulama-e-Soo’ of this worst of eras, along with the masses of Ulama who are completely silent in the face of such evil, is actually becoming a major cause for the sincere layman, concerned with the Ummah and the Haqq, having no option but to turn to the Majlis for succour.

Displaying ever-growing desperation in his insidious attempts to discredit the Majlis, Muadh Khan aims and misfires regular potshots, piping the same monotonous tune regarding the Majlis’s “many errors”, whilst never ever specifying exactly what those “many errors” actually are. This appears to be a common hallucination symptom stemming from an acutely allergic reaction to the Haqq suffered by severely diseased Nufoos. The very same diseased individual who hallucinates “many errors” in the Haqq of the Majlis is able to write and publish the lengthiest and detailed defence online of the satanism of Tariq Jameel, whose “many good deeds” include free-mixing with women and shamelessly advertising such free-mixing on camera (including posing side by side with a Kaafir woman whilst holding a small plaque together), extolling past sins in front of the Juhala masses, treating as brothers in Islam those who explicitly brand and treat the Sahabah (radhiyallahu anhum) as Kaafirs, etc. etc. Something is truly amiss with the brain cell of this individual, and those of his ilk. (End of the Article of Haqq)

The Student has adequately taken the moron bogus ‘mufti’ to task. Our further comment will therefore be superfluous.


By The Majlis


There have now surfaced an abundance of evidence to confirm that Bitcoin is a massive scam set in motion by U.S.A. conspirators. It is a great step forward to achieve total control of the world’s economy by abolishing real currency and replacing it with a ghost ‘currency’.


The following is just one article from numerous others compiled by experts in the field.

Just how low will the financial manipulators crash Bitcoin after pushing it to $20,000?

Make no mistake about it, the engineered and ongoing crash of the cryptocurrency Bitcoin was deliberately timed to begin in earnest just before the Christmas holiday. And it has all gone down so soon after Bitcoin hit a record high of $20,000 on December 17th when the perps artificially inflated its price via high-frequency trading, futures manipulation, and other financial engineering tricks.

Is the BITCOIN bubble bursting in real time? The financial manipulators who planned this unparalleled crypto-collapse did so with great stealth and co-ordination.  Who else could have driven the price of Bitcoin into the crypto-market stratosphere so quickly but the international banking syndicate headed by Goldman Sachs?

Crypto-Carnage: CME Bitcoin Futures Halted Limit-Down
Who is really behind this controlled demolition? Everyone ought to know the answer to this question by now: the BANKSTERS.

And here’s a highly authoritative article that was published by The Wall Street Journal which shows when the banksters actually grabbed a hold of the Bitcoin cryptocurrency platform: Goldman a Lead Investor in Funding Round for Bitcoin Startup Circle

Just as Goldman was the chief financial engineer behind the controlled demolition of the stock market during the Fall of 2008, the same banksters are now demolishing Bitcoin.

Bitcoin plummets in highly volatile trading
It ought to be quite obvious to those folks who did not mortgage their homes to join the Bitcoin rush of 2017 that this pre-holiday demolition was executed with purposeful design.

While so many travel to and fro during this holiday season when drivers, flyers and train passengers are already frazzled and frayed by both the Atlanta Airport power outage and Amtrak train derailment onto Washington State’s Interstate 5, distraction and anxiety about traveling is at an all-time high this year.

Why was an Israeli cargo plane the only one permitted to depart Atlanta during the power outage?
AntiFa bragged about pouring concrete on railroad tracks near Tacoma  

Were these distractions deliberately fabricated during the exact time frame when Bitcoin began its precipitous descent?   And were they also meticulously timed to occur between the hectic period between Thanksgiving and Christmas?

This is exactly how and when the banksters perpetrate their biggest heists—using distraction, diversion and misdirection. They have complete control of the USA and can stage any hoax or false flag operation or terrorist attack when and where they so choose to. Hence, the true cause and timing of every major event during December must be carefully considered in order to correctly comprehend this complex financial black operation. Any rapidly evolving psyop as multi-faceted and captivating as the Bitcoin rip-off is assured to have profound and far-reaching repercussions.

What’s the point of this massive controlled demolition? There are actually a number of critical goals that the banksters would like to accomplish. The more salient objectives are as follows:

After conning investors to move their hard-earned money from gold and silver metals into cryptocurrencies, the banksters can wipe out that investment capital for good so that it is no longer available to support the price of gold.

Such a meteoric and devastating crash of Bitcoin will fully convince the legislators that the time is way past due to impose a strict regulatory regime on all cryptos, not just Bitcoin. In this way, the banksters will effectively control them all–forever.

•  The tremendous degree of conversion of U.S. dollars into Bitcoin is serving to remove a prodigious volume of inflationary petrodollars from the global marketplace. The more Bitcoin buying that occurs on dollar-denominated exchanges, the more US dollars will be eliminated that were produced during the successive cycles of quantitative easing.

(The prime suckers and morons ensnared into this massive trap and swindle are the numerous moron multi-billionaires of the Saudi royalty and the other oil-rich morons of the Gulf States, etc. Bitcoin has been created to pirate off and eliminate the trillions of worthless U.S. dollars. –  The Majlis)

A final crash of the largest cryptocurrency like Bitcoin will set the stage for the FED to institute their new “Fedcoin” as a stable alternative to Bitcoin and Litecoin. Such a dubious move will be explained as a means of preventing naked abuse like this: Litecoin Founder Cashes Out, Sells Entire Stake After 9,300% Rally  

The most significant reason for the supernova explosion of Bitcoin and other cryptos is the normalization of cryptocurrencies. Only in this fashion will they become sufficiently acceptable to people everywhere, whereupon a global digital currency can be established before it’s imposed worldwide via manufactured consent. Even The Economist magazine predicted the introduction of a “world currency” in 2018.

There has never been such an enormous swing in the pricing of any commodity or currency, with such great worldwide import, particularly in the span of just 4 days. There is another HUGE war going on in the background between the BRICS-allied nations and those affiliated with the Zio-Anglo-American Axis. In fact, this ongoing global conflict is reaching a crescendo, especially between the Russia-China partnership and their Anglo-American opponents. The colossal collapse in the Bitcoin price is directly attributed to this clash of civilizations, which is taking place out of existential necessity. The BRICS are grimly aware of the planetary destruction that is transpiring because of Bitcoin mining and are determined to stop it.

If the reader has not figured it out by now, perhaps it’s time to read: BITCOIN BUBBLE: Not if but when it will pop

That Bitcoin will eventually go all the way to $0.00 is practically guaranteed in light of the fact that there’s NO underlying value whatsoever to the cryptocurrency. After all, isn’t that why it’s called a CRYPTOCURRENCY?!

To better understand this highly misunderstood monetary phenomenon, currency investors are encouraged to consult the following exposé: Cryptocurrency Platforms: Owned & Operated by the Banksters

One thing is for sure in the course of this unfolding scam: there will be more than one major sucker’s rally before Bitcoin crashes and burns for good. And it looks like the perps may be setting up the next round of suckers at this very moment.

(Reference: State of the Nation, December 21, 2017)

Cryptocurrency Platforms: Owned & Operated by the Banksters

Digital Currencies Represent the Ultimate Control Mechanism  Over the Global Money Supply

Especially after the fiat currencies crash around the world due to the collapse of the petrodollar will the cryptocurrencies be used as a bridge to establish a new global monetary regime of digital currency.

The comment posted below was written by “Counter Analysis” under the following article:

Evidence Points to Bitcoin Being an NSA-Engineered Psyop to Roll Out One-World Digital Currency  

His analysis is right on target and cannot be disputed.

The power elite would never have permitted the rollout of the various cryptocurrencies unless they exerted complete control over them. And so they do. That they are now traded on the futures market indicates that cryptos are here to stay, as long as they can be totally controlled by the ruling elite. The primary reason for the unparalleled explosion of the BITCOIN market is to get everyone’s attention, which it has. Bitcoin has been around long enough so that investors everywhere have the necessary comfort level to dabble in it. Which many now do.

Regardless of who is really buying Bitcoins, OR SELLING IT SHORT, the cryptocurrency can either continue its supernova run in the firmament of currency investments, or it can disappear overnight should the regulators decide to crack down on it hard.  Which they can do at any time. It’s much more likely that the moneychangers at the very top of the global financial pyramid will keep this new charade going until all paper and coin currency is history, and a global digital currency is firmly in place.

This is the single most important item on the New World Order agenda — stealthily manufacturing consent toward the universal acceptance of a global digital currency. And this globalist goal must be accomplished before their planned One World Government can be established.

Do you see how all the pieces of the NWO puzzle are now conveniently falling into place? (State of the Nation, December 12, 2017)

N.B. The following comment offers an accurate and penetrating analysis of the crypto purpose behind the cryptocurrencies. Everybody is encouraged to pass it around … just in case the supernova does disappear with everyone’s hard-earned money.

Thank you. I’ve been hoping someone would write an expose on this subject. If the deep state were not behind cryptocurrencies, they would be outlawed. Instead they are going to be traded in the futures markets. Nearly half of bitcoin is controlled by a mere 1000 people. This makes it ripe for manipulation like a thinly traded stock, yet I doubt there are any regulations outside of futures exchanges concerning bitcoin manipulation.

I totally agree cryptocurrencies are the approach being taken to acclimate, and disarm people to digital currencies. Whatever features of bitcoin you praise, those features (supposed anonymity, lack of central exchange, etc.) will likely be excluded from the coming digital currency.

Having been previously exposed to digital currencies, a desperate world reeling from banking collapse will embrace a new reset digital currency if it restores their lost wealth, unfreezes credit, gets commerce and food trucks moving again, saves industry (jobs), and provides guaranteed income since many will have lost their jobs. It will be a huge miracle after the intense fear, dread, and panic of banking and currency collapse.

Digital currency enables govt to confiscate or freeze all wealth of anyone at will. Impose negative interest rates that cannot be escaped by bank runs. Makes bank runs impossible. There will be no limit on central bank chicanery. Since all currency remains always in the bank, there will be no limit on fractional reserve banking.

All digital currency will likely be deposited in one central bank clearing house. All other banks and bank branches will not be in the business of holding deposits. They will be in the business of providing the interface with the central bank, and with authorizing credit and lending. So when you buy goods and render payment with your digital currency that resides in your account at the central bank, it transfers to the sellers account at the central bank  and the currency never leaves the central bank for even a split second. Banking collapses are now impossible baring some kind of technological collapse or the wiping out of ledgers, but even then, the central bank will be back up and running as soon as the physical technology backbone is restored. And with block-chain tech, wiped out ledgers could be rebuilt after a hack or temporary bank take-down. Just imagine the identifying information that will be included in the new blockchain that currently does not exist in cryptocurrency block-chain. Identity can be attached to each transaction, ostensibly to provide security for your account, so that even if it is hacked, the damage can be traced and reversed.

The whole world is virtually internet connected either by wire, cell tower, or satellite. Every transaction can be immediately authorized or declined, especially with a redundancy of connections. A combination of block-chain and central  bank ledger can be disseminated to local bank branches and even individuals’ cell phones to prevent an interruption in commerce should communication with the central bank be compromised. Then the block chain and ledger can be matched and resolved with the central bank when the connection is resumed.

I very very strongly suspect this will be the mark of the beast system of buying and selling. It is still uncertain what the “mark” will be. It could be a microchip or a microchip accompanied by a tattoo showing where to scan for the microchip. Whatever it is, it will have to be something that can be rolled out quickly on a massive scale. How close are we. Watch for clues in any development of technology or infrastructure that can enable a rapid massive scale deployment of the new system. It will have to be ready to go in a matter of days to prevent a complete societal breakdown when the current banking system collapses. The new system may already be complete and ready for roll-out. There is no way to be sure, but watch for any clues.

Submitted by “Counter Analysis”



BYMufti Zar Wali Khaan (Shaykhut-Tafseer Wal-Hadeeth of Jaami’ah Ahsanul-Uloom Pakistan)

(Translated from Urdu)


(The ‘error’ is egregiously deliberate. The intentional ‘error’ is the effect of the avarice and greed for the tens of thousands of dollars which the international riba banks pay to these miscreant molvis and sheikhs for  issuing fatwas of jawaaz – permissibility – for their haraam riba products – The Majlis)

Some people began to announce that interest is haraam and it is obligatory to abstain from it. (Every jaahil Muslim is aware of the evil of riba. However, this announcement refers to the wiles of those who plotted to capitalize on this Shar’i prohibition by operating  so-called ‘islamic’ banks where RIBA dealings are deceptively affixed with Islamically-sounding designations to dupe the ignorant, and to provide cover for the wealthy, greedy, money-hungry  Muslim capitalists – The Majlis)

The so-called ‘islamic-banks’, fraudsters, deceits and liars who plunder and pillage the Imaan of the Ummah started taking advantage of it (i.e. of Islam’s prohibition of interest to  establish so-called ‘islamic’ banks where the same western riba system  operate, camouflaged with Islamic nomenclature –The Majlis)  Oh! that Al-Meezaan marvellous! Oh! that Al-barakah!  (Al-Meezaan is Mufti Taqi’s riba bank – The Majlis)

But, in reality there is no islaamic-bank in the whole world, not even in the noble Arab lands. There was one Al-Faisal ‘Islamic’ bank regarding which 300 senior Ulama of Makkah informed the King that “we find nothing of Islam in it. On the contrary, it is an institution of sheer interestThen while Al-Faisal bank continued with its existence, the term, Islam was deleted from it’s name so that Islam is not disgraced.

This is theft and trickery because haraam is perpetrated and perpetuated in the name of Islam. Four hundred Fuqaha from Karachi and from  around Pakistan have issued a written statement that in these so-called ‘islamic’ banks there is not even a hundredth part of a percent of Islam. Just as Ghulaam Ahmad Qaadiyaani is not a Nabee, and just as there is nothing of Islam in him, so too, in the same manner the banking system (the so-called ‘islamic’ banking system) is way- extremely far away from Islam. (These banks have no resemblance to Islam and not even have they any semblance of Islam. They are gigantic frauds, heinous agents of shaitaan. They market Rnna as trade. Describing them, the Qur’aan Majeed says: “Those who devour riba do not stand except as one who has been driven to insanity by the touch of shaitaan. That is because they say: ‘Verily, trade is like riba.’, whilst Allah has made halaal trade and made riba haraam.” There in ordered lust for the dollars has maddened them, deranged their brains and constrained them to barter away their Imaan for the boodle. – The Majlis)

Then there are those interest-based banks which people understand to be wrong as there is interest involved in it. There is lesser evil in these interest-based banks in comparison to the so-called ‘islamic’-banks, because when people deal with these interest-based banks they do so with a guilty conscience. They understand that they are embroiling themselves, Thus they acquire the taufeeq to repent. The supplicate: “Yaa ALLAAH! Do forgive us and provide us with such halaal means which are free from even a cent of contamination.” It is stated in the Hadeeth:

“To take even a dirham of interest is like fornicating seventy times with one’s own mother within the Baitullaah.” (This is the satanism which the bank molvis and the bank ‘shariah’ boards halaalize. – The Majlis)

People dealing with these interest-based banks acknowledge their sin and consider themselves to be sinful. But these so-called ‘islamic’-banks are looters in the name of Islam. There is absolutely nothing of Islam in them. Neither in Mezaan bank (of Mufti Taqi) nor in Al-barakah bank nor in any of other myths which are dubbed ‘islamic’-banks.

Ulama are unanimous that those Ulama (Ulama-e-soo’ – The Majlis) who are leading (and misleading – The Majlis) these so-called ‘islaamic banks are in a manifest error. The most senior amongst the Ulama, Maulana Saeemullaah Khaan (Rahmatullah alayh) had held a gathering of Ulama of Pakistan against these banks. The country’s most esteemed Madrasah Jaami’ah Islaamiyah published a book in refutation of these banks. Four hundred Fuqaha and Muftiyaan collectively prepared a written statement in which they categorically declared the nullity of these ‘islamic’ banks. They are null and void even in the remotest sense of Islam.

These banks are blatantly interest institutions. They are sheer interest or even worse than interest. When the heads of these banks were questioned they informed, they conceded their interest dealings. They said: “We give the interest amount to the other donors, we give them the profits too.” (This is the convolution stupidly and irrationally disgorged by those whose brains have been deranged by the spell of Shaitaan. – The Majlis) Then the hoodwink people, deceiving them to accept that this (satanism) is ‘islamic’.

If someone describes a beautiful donkey or a mule to be a mountain bull to some ignorant person, the donkey/mule is not transformed into a mountain bull, and such deception does not become halaal. The donkey and mule will remain a donkey and a mule. Or, if someone places a container of sewerage-gutter water in his fridge and affixes to it a label on which is printed with Maa-uz-Zamzam or Maa-ul-Hayaat or Maa-ush-Shifaa, there then just as this is deceit, so too is the deceit of those claiming that these banks  are  ‘islamic’. They are guilty of the most heinous lies.

Al-Hamdulillaah, Lahore is one of the leading cities of our country in which the Fuqaha and Ulama have assembled at this time. The Ulama from around the country gathered under the leadership of our Buzrugh Mufti Habeebullaah Jaan, and they once again warned the banks that they should not label any of their departments as ‘islamic’ and that they should not resort to lies. They emphasised that there is not a single place in the whole world where the banks are on the way Islamic.

When banks started putting up the banners ‘islam’, calling themselves ‘islamic’ banks, I asked one banker how is this possible? He replied: “it is not so. Our work progresses as people search for something”.

Khasirad-dunyaa wal-aakhirah.

(Destruction for him in the dunyaa and the Aakhirah.)

Thaalika huwal-khusraanum-mubeen.

(That is indeed a manifest destruction.)


Al-Hamdulillaah, our Jaami’ah ‘Arabiyah Ahsanul-‘Uloom has also published a special edition on this subject. Its name is, “So-called islamic-bank – Clarification, Research, Fataawaa.

In the light of the research of the Fuqaha and Ulama, a veritable encyclopaedia has been prepared. Even prior to this, I have discussed the issue and have informed people, and safeguard their Imaan from the fraud of those who are perpetuating the haraam myth and deceiving in the name of Deen. Laa Ilaaha Illallaah!

The need for this clarification) arose as some people were saying that haraam is being perpetuated on a massive level, and even some molvis too are involved in it. So Maulana Saleemullaah Khaan (Rahmatullah alayh) who is their Ustaadh (He is the Ustaadh of Mufti Taqi – The Majlis) said in the same gathering: “They are not speaking the truth in this matter.” This statement of his has been recorded. That program is preserved and is on record. The write-up of that program was also published by Ahsanul-‘Uloom. These forty Fuqaha present at that time in the gathering have endorse it, stating that there is no ‘islamic banking anywhere, and that those so-called ‘islamic’ banks) are in conflict with Islam, and that it is necessary to abstain from them.

Laa Ilaaha Illallaah! What kind of age has dawned? There is dissension amongst Ahle-Haqq also. Those who are consider the flag-bearers of Deen and Ilm have fallen in manifest deviation. (They may have been associated at one time with the Ahl-e-Haqq. But now they have brazenly aligned themselves with Ahl-e-Baatil – The Majlis)

May Allaah Ta’ala safeguard the Imaan and the Khatamah (Maut – the end of life) with Khair and Aafiyah (Aameen)……

“Laa yakhaafoona fillaahi law mata laaim”

(They don’t fear the criticism of the critics (in matters of the Deen) – Qur’aan

Those to whom Allaah Ta’ala bestows such a lofty rank, they fearlessly proclaim such masaa-il (Haqque) so that the Muslims may safeguard their Imaan.